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Paraguay Begins to Audit Local Crypto Industry to Comply with FATF Guidelines

Paraguay is looking to take its cryptocurrency industry mainstream, in light of the Financial Action Task Force’s (FATF) guidance on virtual asset service providers (VASPs) released earlier this year.

The Secretary for Preventing Money and Property Laundering, and the country’s anti-money laundering (AML) chief announced a crypto survey in the nation. The VASPs were asked to open their books to the government for auditing purposes for the first time.

The guidance on VASPs issued by the FATF in June prompted the Latin American country’s audit, which will help Paraguay’s government to understand its local crypto industry. According to CoinDesk, the Secretary for Preventing Money and Property Laundering said that it would “pave the way for the country’s first crypto-specific regulations,” which are headed to roll out in the first half of 2020.

Secretary Minister Christian Villanueva said, “Data obtained will be used to measure the degree of adoption, complexity, and size of the virtual asset market in Paraguay, with the purpose of drafting a regulation that adequately regulates them and mitigates the risk of misuse.”

The nation’s central bank warned that guarani currency is the only legal currency in the country last June. The International Monetary Fund estimated that informal employment takes up more than half of the country’s total jobs.

Following Investigations in Brazil for Crypto Scams, Ronaldinho Faces Arrest for Using Fake Passport

A widely celebrated and popular professional footballer known as Ronaldinho is under arrest for attempting to enter Paraguay with a fake passport. He is an elite in the sport and as of March 4, the star is currently detained and under investigation. This relates further back to his participation in companies fraudulently operating cryptocurrency scams under his name.

The events of the arrest took place at the Paraguay Golf Club where the former footballer was staying. Upon searching the hotel suite, the police found two fake Paraguayan passports under his name and his brothers. When questioned, it was revealed that he visited the country to endorse a community campaign promoting a foundation which supplied medical assistance to children in poverty.

On March 5, the Ronaldinho and his brother left the hotel, to give a statement regarding the case. The prosecutors in Paraguay then issued an arrest warrant for the guilty parties, according to the Mexican news outlet, Milenio 2020. Furthermore, the controversy only adds to the other ongoing investigations being carried in Brazil, relating to his two fraudulent companies applying scams with Bitcoin.

The US Securities and Exchange Commission’s latest investigation into Telegram revealed court documents showing the participation of Russian Oligarch, Roman Abramovich, in the company’s ICO. Details show that Abramovich appeared to have involved himself in the second round known as Stage A in March 2018. Moreover, the sale of Perth Glory FC, an Australian Soccer Club has been put in question as they battle allegations regarding potential buyers with an ongoing misrepresentation case in the UK. In early February, it was announced that the owner may have to let go 80% ownership to London Football Exchange.

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Paraguay Introduces Bill to Make Bitcoin Legal Tender

South American nation Paraguay has introduced a bill in its national assembly to make Bitcoin a legal tender, trailing the path of El Salvador.

Congressman Carlitos Rejala introduced the Paraguayan Bitcoin bill, which will position Paraguay to advance in line with this new generation if the bill passed successfully.

“As I was saying a long time ago, our country needs to advance hand in hand with the new generation. The moment has come, our moment. This week we start with an important project to innovate Paraguay in front of the world!” Rejala said in a Tweet, per a Google translated version.

The idea behind implementing Bitcoin as a legal tender has long been debated amongst the cryptocurrency communities. El Salvador President Nayib Bukele broke history when he officially persuaded lawmakers to pass the Bitcoin as a Legal Tender Bill. Following the plans to affect the implementation of the cryptocurrency by September 7th.

Learning from El Salvador’s current struggles, the roadmap on implementing the Bitcoin bill may be arduous. First, the International Monetary Fund (IMF) warned of legal and economic challenges that may impact the implementation and eventual transition to Bitcoin in El Salvador.

Additionally, the World Bank refused the Caribbean Island nation’s request by offering help to implement plans, citing the lack of transparency and environmental considerations. Paraguay may face similar challenges if the administration insists on conducting this path.

Just as El Salvador is planning to venture into Bitcoin mining through Geothermal energy obtained from its Volcanoes, Rejala and the proponents of the Bitcoin bill believe Paraguay can also leverage its excess hydroelectric to mine Bitcoin.

According to Euronews, the bulk of Paraguay’s energy is currently sold to neighbouring countries, including Brazil and Argentina. While the Bitcoin bill is still in its infancy, the country’s Bitcoin industry stakeholders are gearing up for the opportunities that lie ahead.

Paraguay To Introduce Bitcoin law, Draft Leaks details

Paraguay is expected to be another country worldwide to propose Bitcoin law after El Salvador, Bitcoin as Fiat Money.

The incoming bill is expected to introduce on Wednesday local time, which would request registration of cryptocurrencies under the Under-secretariat of State of Taxation (SET), according to Decrypt, a report Tuesday, citing a leaked draft copy in Spanish.

“The objective of this draft law is to establish legal certainty, financial and fiscal in the business derived from the production and commercialisation virtual assets”.

On the other hand, the bill would also regulate trading and crypto mining through exchanges and peer-to-peer marketplaces where require users to register as obligated subjects, based on Decrypt’s reporting. Therefore, “virtual asset mining should be recognised as an industrial activity within the Ministry of Industry and Commerce since it uses capital, labour, machinery and construction of civil infrastructure for produce a product,” according to the draft.

Legislator Carols Rejala and Senator Fernando Silva Facetti, two congressmen who belong to separate and different parties are considered the founding members to facilitate Bitcoin in the country jointly. Rejala has expressed his ambition on Twitter to push an important project, referring to the campaign of launching Bitcoin law.

Bitcoin nation?

Paraguayan is very likely to become the first country in South America and the second country worldwide to adopt Bitcoin as legal tender after El Salvador if the Paraguayan congress successfully passes the Bitcoin law.

El Salvador has approved and announced to adopt Bitcoin as legal tender, effective from September 7, as the Latin American country, passed the Bitcoin law since June. Yet, more than three-quarters of Salvadorans are remaining cautious and sceptical towards adopting this emerging fiat money.

Voices concern if Paraguay could successfully facilitate Bitcoin to reform its monetary policy.

Bitcoin was trading $31.923.4, down by 4.0% during the intraday, bounced by the low at the $31,711.06 level.

Paraguayan Congressmen Propose New Bitcoin Bill

Paraguayan lawmaker Carlitos Rejala has drafted and ready to propose the new bitcoin bill to congress, according to TheStreet Crypto report.

After the leakage of the Bitcoin bill draft disclosed to the public Tuesday, Paraguayan congressmen Carlitos Rejala and his companion’s politicians have created the bill and ready to propose to the congress for regulating Bitcoin and cryptocurrencies in this South-American country, according to local media TheStreet Crypto report Wednesday.

According to the report, the objective of the new bill is to “regulate the activities of production and commercialisation of cryptocurrencies”.

Actors who intend to conduct crypto mining are requested to get virtual assets mining licenses; these mining operations will also be approved and overseen by the authority. The legislation will categorise the mining activities as “innovative and elector-intensive industry”.

Rejala welcomed the proposal on Twitter, saying the proposal will allow Paraguaya to get an advantage from this virtual currency, describing it as a competitive industry and plans to lead in sustainable Bitcoin mining by “safeguarding and optimising renewable energy”.

”The big day has finally arrived. The future is now #Bitcoin.”

Yet, the market tends to remain cautious and polarized about the new bill. “It is important to see if the actual bill turns out to be ‘crypto-friendly’ because in some cases governments have promised to regulate crypto, but the actual legislation was underdeveloped and put excessive scrutiny on companies and individuals,” Kirill Suslov, CEO of trading app TabTrader said.

On the other hand, “Being regulated (the bill) should take away the risk for investors, which makes it easier to attract capital,” said Ruud Feltkamp, CEO of crypto trading bot Cryptohopper.

The market also concerns about the issue of the circulation of Bitcoin. About 90% of Bitcoins in existence haven’t been converted to fiat currency in over a year, according to JPMorgan’s report, which was cited first by Bloomberg. Most of the Bitcoin that people own could be being held in virtual crypto wallets, which means a large part is not being converted to fiat currencies and being locked up in illiquid entities.