Peru -- Custody Regulations Regulatory Overview

Peru currently lacks a comprehensive, dedicated regulatory framework specifically for cryptocurrency/digital asset custody. The existing regulations primarily address Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) aspects for Virtual Asset Service Providers (VASPs), including those offering custody services, and generally issue warnings about the risks associated with cryptocurrencies.

Here's a breakdown of the situation regarding cryptocurrency custody regulations in Peru:

1. Overall Regulatory Landscape

• No Specific Crypto Custody Law: Peru does not have a specific law or regulation defining or governing digital asset custody as a distinct financial service with its own licensing or operational requirements.
• Focus on AML/CFT: The main regulatory intervention concerning cryptocurrencies comes from the Superintendency of Banking, Insurance and Private Pension Fund Administrators (SBS) through its Financial Intelligence Unit (UIF), primarily focused on preventing money laundering and terrorist financing.
• Central Bank Stance: The Central Reserve Bank of Peru (BCRP) has consistently stated that cryptocurrencies are not legal tender, are volatile, and carry significant risks, discouraging their use by regulated financial entities.

2. Custodial License Requirements

• No Dedicated Custody License: There is no specific "custodial license" for digital assets in Peru.
• VASP Registration for AML/CFT: However, entities that offer virtual asset services, including custody, are considered Virtual Asset Service Providers (VASPs) under Peruvian AML/CFT regulations and must comply with registration and reporting obligations.
  • Regulation: Resolution SBS N° 00194-2020 (amending Resolution SBS N° 789-2018 and Resolution SBS N° 070-2017) defines VASPs and requires them to register with the UIF-Peru and implement AML/CFT measures. This includes:
    • Customer Due Diligence (CDD) procedures.
    • Record-keeping requirements.
    • Reporting of suspicious transactions (STRs) to the UIF.
    • Implementing risk management systems for ML/TF.
  • Regulatory Reference:
    • Resolution SBS N° 00194-2020: Modifica el Reglamento de Gestión de Riesgos de Lavado de Activos y Financiamiento del Terrorismo y otros. (Amends the Regulation of Risk Management of Money Laundering and Terrorism Financing and others).
      • While the direct link to the specific text on the SBS website might change, you can typically find it by searching "Resolución SBS N° 00194-2020" on the SBS website (sbs.gob.pe). A general link to the SBS normative search: https://www.sbs.gob.pe/buscadornormas
    • UIF-Peru Website: Provides general information on ML/TF prevention and reporting entities. https://www.sbs.gob.pe/uif

3. Segregation of Client Assets Rules

• No Specific Mandates: There are no explicit regulatory mandates in Peru specifically requiring the segregation of client digital assets from the custodian's operational assets for non-bank entities.
• Best Practice vs. Regulation: While industry best practices strongly recommend asset segregation for security and to protect client funds in case of custodian insolvency, this is not a legal requirement for crypto custodians in Peru.
• Traditional Finance: In traditional finance, regulated entities (banks, broker-dealers) are subject to strict asset segregation rules. However, traditional financial institutions in Peru are largely discouraged from dealing with crypto assets, so these rules do not extend to crypto.

4. Insurance/Bonding Requirements

• No Specific Mandates: There are no specific regulatory requirements for insurance or bonding for cryptocurrency custodians in Peru.
• Risk Mitigation: Custodians operate without a regulatory safety net in this regard, meaning clients bear the full risk of loss due to hacks, operational failures, or insolvency.

5. Cold Storage Mandates

• No Regulatory Mandates: Peruvian regulations do not mandate the use of cold storage (offline storage of private keys) for digital assets.
• Industry Best Practice: Cold storage is widely recognized as a critical security measure in the crypto industry to protect against cyber theft, and reputable custodians typically employ it. However, it's not a legal requirement.

6. Qualified Custodian Definitions

• No Definition: There is no specific regulatory definition of a "qualified custodian" for digital assets in Peru.
• Traditional Context: In other jurisdictions (e.g., the U.S. under SEC rules), a "qualified custodian" typically refers to a regulated bank, trust company, or broker-dealer that meets certain capital, audit, and operational requirements. Since regulated financial institutions in Peru are largely outside the crypto space, this concept has not been applied to digital assets.

7. Pending Custody Legislation

• Ongoing Discussions: There have been several legislative initiatives in the Peruvian Congress aiming to regulate digital assets and fintech.
• Proyecto de Ley (Draft Law) N° 1083/2021-CR and subsequent similar projects: This particular project, among others, has sought to create a legal framework for crypto assets, including potential provisions for licensing, consumer protection, and operational requirements for VASPs. While it hasn't passed, it indicates an interest in formalizing regulation.
  • Status: These projects are often debated, amended, and can sometimes stall or be replaced by new initiatives. As of late 2023/early 2024, no comprehensive framework has been enacted into law.
  • General Search for Legislative Progress: You can monitor the Peruvian Congress website for "Proyectos de Ley" (Draft Laws) related to "criptoactivos," "activos virtuales," or "fintech."
    • Peruvian Congress Website: https://www.congreso.gob.pe/ (Navigate to "Leyes y Proyectos de Ley").

In summary: While Peru has taken steps to integrate VASPs into its AML/CFT framework, it has not yet developed a specific regulatory regime for digital asset custody that addresses licensing, asset segregation, insurance, cold storage, or the definition of a qualified custodian. Operators currently navigate a landscape where they must comply with AML/CFT requirements but lack explicit guidelines for the secure and compliant holding of digital assets.

Disclaimer: This information is for general informational purposes only and does not constitute legal advice. Regulations are subject to change, and specific legal counsel should be sought for any particular situation.