Crypto ATM / kiosk operator in Paraguay

Banco Central del Paraguay (BCP) - Central Bank of Paraguay.

Secretaría de Prevención de Lavado de Dinero o Bienes (SEPRELAD) - Secretariat for the Prevention of Money or Asset Laundering.

October 2023 (SEPRELAD Resolution): SEPRELAD issues Resolution No. 343/2023, establishing the regulatory framework for the prevention of money laundering and terrorist financing for VASPs. This means non-compliance with these rules could lead to future fines.

July 2022 (BCP Warning): The BCP issued warnings about the risks associated with cryptocurrencies.

SEPRELAD (Secretaría de Prevención de Lavado de Dinero o Bienes): This is the key regulatory body for AML/CFT compliance for virtual assets. SEPRELAD defines Virtual Asset Service Providers (VASPs) and sets forth their obligations.

Resolution No. 222/2022: This resolution from SEPRELAD specifically established guidelines for the prevention of money laundering and terrorism financing for Virtual Asset Service Providers. It defines what constitutes a VASP and outlines their obligations.

Resolution No. 24/2023: This resolution modified certain aspects of Resolution No. 222/2022, particularly detailing reporting requirements for VASPs.

FATF Recommendations: Paraguay, as a member of GAFILAT (the regional FATF-style body), adheres to FATF recommendations, which include guidance on virtual assets and VASPs (Recommendation 15 and its Interpretive Note).

Law No. 7041/2023: While primarily focused on the energy aspects of crypto mining, this law indirectly touches upon the commercialization of crypto. However, it does not establish a specific licensing regime for VASPs in the sense of financial services licensing, deferring that to SEPRELAD's AML/CFT framework.

Exchanges (Virtual Asset Exchange Providers): Entities that conduct the exchange between virtual assets and fiat currencies, or between one or more forms of virtual assets, are considered VASPs.

AML/KYC (Anti-Money Laundering / Know Your Customer): This is the core requirement.

Robust Policies and Procedures: Implementation of comprehensive AML/CFT policies and procedures, including risk assessment, customer due diligence (CDD), enhanced due diligence (EDD) for high-risk customers, and ongoing monitoring.

Customer Identification and Verification: Collecting and verifying identity information for natural and legal persons (KYC).

Transaction Monitoring: Monitoring transactions for suspicious patterns and activities.

Suspicious Activity Reports (SARs): Reporting suspicious transactions to SEPRELAD.

Compliance Officer: Appointment of a qualified and designated Compliance Officer responsible for AML/CFT compliance.

Employee Training: Regular training for employees on AML/CFT obligations.

Record Keeping: Maintaining records of customer identification data and transactions for the prescribed period (usually 5 years).

Legal Entity: The VASP must be established as a legal entity (e.g., corporation or limited liability company) duly registered in Paraguay.

Registered Office: Maintenance of a physical registered office in Paraguay.

SEPRELAD's resolutions for VASPs do not explicitly define a minimum capital requirement for the purpose of AML/CFT registration. However, as a business operating in Paraguay, the entity must demonstrate financial solvency and operational capacity, which implies having sufficient capital to operate responsibly and meet its obligations. Financial institutions, if a VASP were to be considered one, would have capital requirements imposed by the Central Bank (BCP), but currently, VASPs are primarily regulated for AML/CFT purposes, not as licensed financial institutions.

Outcome: Increased awareness of risks, and a clear signal that regulatory oversight for VASPs is developing. SEPRELAD has issued guidance on AML/CFT for VASPs, indicating future enforcement will likely come from them once a comprehensive licensing regime is in place.