In a significant move to strengthen financial oversight, Peru has introduced a new presidential decree requiring all cryptocurrency exchanges operating within the country to comply with anti-money laundering (AML) regulations. This development marks a pivotal step in aligning the nation’s digital asset policies with international standards and addressing growing concerns around illicit financial activities tied to virtual currencies.
The new regulation mandates that all Virtual Asset Service Providers (VASPs)—including individuals and companies involved in crypto-related services—must register and report relevant transaction data to the Financial Intelligence Unit of Peru (UIF-Peru). As the central authority responsible for detecting and preventing money laundering and terrorist financing, UIF-Peru will now have enhanced oversight over the crypto sector.
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Defining Virtual Asset Service Providers
Under the decree, a Virtual Asset Service Provider is broadly defined to include any entity engaged in:
- Exchanging virtual assets for fiat currency (e.g., Peruvian Sol, USD)
- Swapping one form of cryptocurrency for another (e.g., Bitcoin to Ethereum)
- Transferring virtual assets between wallets or users
- Providing custody or portfolio management services for digital assets
- Offering financial services related to the issuance or sale of virtual assets
This comprehensive definition ensures that a wide range of crypto businesses fall under regulatory supervision, reducing opportunities for bad actors to exploit regulatory gaps.
Aligning with FATF Standards
A core objective of the new law is to bring Peru into compliance with recommendations from the Financial Action Task Force (FATF)—the global watchdog for AML and counter-terrorist financing (CFT) policies. In particular, the regulation emphasizes adherence to FATF’s "Travel Rule," which requires VASPs to share sender and recipient information during cryptocurrency transactions exceeding certain thresholds.
The Travel Rule, originally modeled after traditional banking protocols, aims to increase transparency in digital asset transfers. By enforcing this rule, Peru is signaling its commitment to responsible innovation in fintech and its willingness to cooperate with international financial authorities.
While the decree is already in effect, UIF-Peru is expected to release detailed implementation guidelines in the coming days. These will clarify compliance requirements such as customer due diligence (CDD), ongoing monitoring, suspicious activity reporting, and data retention protocols.
Why This Matters for the Crypto Industry
Peru’s regulatory shift reflects a broader trend across Latin America, where governments are increasingly recognizing both the potential and risks of cryptocurrency adoption. With rising usage of digital assets for remittances, peer-to-peer trading, and investment, regulators are stepping in to ensure consumer protection and financial integrity.
For legitimate crypto businesses, these rules may mean higher operational costs and more rigorous compliance procedures. However, they also offer long-term benefits:
- Increased legitimacy: Regulated exchanges gain public trust and institutional credibility.
- Greater access to banking services: Compliance improves relationships with traditional financial institutions.
- Support for innovation: Clear rules create a stable environment for startups and investors.
Moreover, by adopting global AML standards, Peru positions itself as a responsible player in the international financial system—one that supports technological advancement without compromising security.
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The Road Ahead: Enforcement and Education
Effective regulation requires more than just legislation—it demands enforcement capacity and public awareness. UIF-Peru will need to invest in training, technology, and inter-agency collaboration to monitor compliance and detect suspicious activity.
At the same time, educational outreach will be crucial. Many Peruvians use cryptocurrency through informal channels or unregulated apps. Raising awareness about safe practices, regulated platforms, and the dangers of illicit finance can help users make informed decisions.
The government may also consider launching a public registry of authorized VASPs, allowing consumers to verify which platforms meet regulatory standards. Such transparency would empower users and discourage non-compliant operators.
Broader Implications Across Latin America
Peru’s action could influence neighboring countries evaluating their own crypto frameworks. Nations like Argentina, Colombia, and Chile are already exploring similar regulations, and Peru’s approach may serve as a model.
Regionally, coordinated AML efforts could enhance cross-border cooperation and reduce opportunities for regulatory arbitrage. As digital assets become increasingly borderless, regional alignment on rules like the Travel Rule becomes essential.
Frequently Asked Questions (FAQ)
Q: What does the new Peruvian law require of crypto exchanges?
A: All crypto exchanges and virtual asset service providers must comply with anti-money laundering regulations, including reporting transaction data to UIF-Peru and implementing customer identification processes.
Q: What is the FATF Travel Rule and how does it apply in Peru?
A: The FATF Travel Rule requires crypto platforms to collect and share sender and recipient information for certain transactions. Peru’s new decree enforces this rule to improve transparency and combat financial crime.
Q: Are peer-to-peer crypto transactions affected by this law?
A: The law primarily targets regulated service providers like exchanges. However, if P2P platforms operate as businesses or facilitate large volumes of trades, they may be classified as VASPs and subject to compliance.
Q: When do crypto companies need to comply?
A: The decree is already in effect. While specific guidelines from UIF-Peru are pending, companies should begin preparing their AML programs immediately.
Q: How will this impact users in Peru?
A: Users on regulated platforms may experience additional verification steps (KYC), but they’ll benefit from greater security, fraud protection, and access to compliant financial services.
Q: Does this ban cryptocurrency in Peru?
A: No. The law does not prohibit crypto ownership or use. Instead, it regulates service providers to ensure safe and transparent markets.
As digital assets continue to evolve, so too must the frameworks governing them. Peru’s proactive stance demonstrates that thoughtful regulation can coexist with innovation—protecting citizens while fostering a trustworthy crypto ecosystem.
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