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Bitso migrated its operations with cryptocurrencies to the jurisdiction of Gibraltar.Emilio Rivero says that the law will be positive for users, but expensive for the startup.In the framework of the transitional provisions of the named Law FinTech Mexico, this month of September is the deadline for Institutions to Financial Technology (FTT) to register with the comision Nacional Bancaria y de valores (CNBV) to be able to legally operate. Emilio Rivero, senior analyst of risk and corporate affairs of the house of the change of cryptocurrencies Bitso, with headquarters in Mexico City, considers that several of the requirements under this regulation could be costly for some companies.In an interview to the Breaking News, Rivero argued that the main challenges for FinTech mexican will be the cost and expertise needed. “The majority of the companies operations were carried out and which are now regulated activities, were people who sought to undertake,” he said.Under his optics, “now, with the requirements set forth, shall have a corporate governance well-structured, compliance officers, safety officers, information to, among others, which represents an increase in costs that could interfere with the viability of many startup or entities, that in the end are small and medium-sized enterprises”.In fact, the house of the change of cryptocurrencies Bitso is adapted to the regulation separating its operations into two parts, that is to say, while using mexican pesos, customers will continue using existing services such as the Interbank Electronic Payments System (SPEI), funding in cash or Bitso Transfer. These services will remain under the operational oversight of the reason social Bitso SAPI de CV, which is regulated by the Law Regulating Institutions of Financial Technology, better known as the Law of FinTech Mexico.On the other hand, Rivero, explained that in regard to interactions with cryptocurrencies, all the activities of Bitso, including custody, delivery, withdrawal and trading of cryptocurrencies, were migrated to a jurisdiction outside of Mexico. Since the first of August of this year, those operations are under a framework that was developed specifically to regulate the business in the sector of the cryptocurrencies of the Financial Services Commission of Gibraltar (GFSC, for its acronym in English).Emilio Rivero commented that the strategy of Bitso to comply with the provisions of the Law, FinTech, was to divide its operations. Photo: Twitter profile @EmilioRivCoelloEstos movements form part of the strategy of Bitso to adapt to the rules issued by the Central Bank of Mexico (Banxico), which prohibit the ITF or of credit institutions (CI) which provide the general public operations with digital assets (cryptocurrencies). However, the rule allows the exchange houses of cryptocurrencies not regulated can continue to operate. That is to say, the startup regulated may not operate with cryptocurrencies, while those who traded with cryptocurrencies, although not included in the regulation, may not carry out exchanges of cryptocurrencies against mexican pesos.In terms of the Law, FinTech, one of the most important aspects is that it considers the issuance of a license for the creation of digital assets, which covers platforms and services that operate with the currency of national circulation, and allows for the issuance of payments to internal and external, which is forcing exchange houses to make modifications in their operations.In this sense, Bitso reaffirmed its commitment to disclose and maintain a transparent way, the just separation between the services provided in Mexico and delivered in Gibraltar.
What will happen with the users?
According to Rivero, when the users of Bitso to interact with mexican pesos, either by means of SPEI, funding in cash or Bitso Transfer, will continue to use the services of Bitso SAPI de CV, in Mexico, a company that operates under the terms of article eighth transitory of Law FinTech.On the other hand, indicated that the trading services of cryptocurrencies, custody as well as the delivery and withdrawal of the same, now regulated by the DLT Regulatory Framework of the GFSC, will not be affected by the change of jurisdiction to Gibraltar.
This decision does not in any way affect our users, because the interfaces with which they interact today, will remain the same: the website, the app and/or the APIs. In this sense, while our users use our platform, they can now observe some of the legends and terms that help to remind them what company they are operating. These small changes are just to improve your experience on our platform.Emilio Rivero, senior analyst of risk and corporate affairs of Bitso
As to whether immigrants will be able to mobilize their cryptocurrencies in mexican territory, Rivero emphasized that “the mobility of cryptocurrencies does not have change as a result of these laws. In general, the cryptocurrencies continue to operate the same.”
What will you offer businesses?
With respect to the term of this legal framework and how it will impact the new startups that wish to enter the ecosystem, Rivero stressed that companies that are able to comply with the regulation in Mexico, you will have the ability to offer more reliable services to their users.In his opinion, “this is because the regulation is that the companies that perform the activities prescribed by Law and FinTech comply with specific practices such as: separation of funds mandatory, capital requirements, availability of funds, log of movements for the client and balances, standards of cyber security, protection of users by the National Commission for the Protection and Defense of Users of Financial Services (Condusef), etc”.In the end, according to said Rivero, the benefit for the users will be positive. However, she reiterated that some of the requirements of the Law might be too high for some companies.
In terms of the implications for the business as such, and to the houses of change, a time completion of the maturity period, Rivero considered that at this time you can not give any idea about the implications that will have for the ecosystem FinTech, ”well, we would have to wait to see what the response of the authority on the whole process that has been carried out”.On the possibility of requesting a challenge of this law, Rivero said that “the legal framework is sufficiently robust and, therefore, the institutions always have the power of objecting to a set of laws”.In the light of the expectations on the Law of FinTech, Rivero said that it is still unknown what type and what money exchange will be operating. “We have No idea yet, because we do not have information about which companies applied or not to the law, as each startup is taking its own strategy”.As to what will happen with the teller of cryptocurrencies, clarified that Bitso does not operate with cash. However, other analysts explained that, in effect, the cashiers do come in the course of the article 17 of the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin, and will have to comply with all the obligations referred to in the article and in the law, as to give notice to the authority when operations are conducted by a quantity equal to or exceeding 54.496 mexican pesos or the equivalent of 645 Units of Measure, and Update (UMA), that is the reference to economic weights for the calculation of tax obligations .What is certain is that formally on Tuesday, September 25, will expire on the deadline established in the Law FinTech, which regulates the ITF, for which companies in Mexico, including the houses of change of cryptocurrencies, request authorization from the CNBV, a regulatory body of the mexican financial system. The order is to operate under the specter of a regulatory framework.