Latin American countries are making significant strides in cryptocurrency compliance frameworks, though risks related to illicit financial flows remain, according to a new report by blockchain intelligence firm TRM Labs. The analysis notes improved regulatory coordination and enforcement actions across the region, particularly in Brazil and Argentina, where authorities have stepped up anti-money laundering (AML) efforts.
Sources familiar with regional crypto policies indicate that at least six Latin American jurisdictions have implemented new licensing regimes for virtual asset service providers (VASPs) in the past 18 months. “We’re seeing measurable progress in countries that previously had minimal oversight,” said a financial compliance analyst who requested anonymity due to ongoing work with regulators.
The report comes as the Financial Action Task Force (FATF) prepares its 2024 evaluation of Latin American AML standards. Regional officials have reportedly increased information-sharing with U.S. agencies, including the SEC and FinCEN, to track cross-border crypto transactions.
However, TRM Labs identified persistent vulnerabilities in smaller economies where cash-based informal markets remain prevalent. Analysts warn that without uniform adoption of Travel Rule protocols, the region could become an attractive hub for bad actors seeking to evade stricter regimes in North America and Europe.
Looking ahead, market observers suggest the upcoming Summit of the Americas could yield new multilateral agreements on crypto oversight, potentially establishing common standards for the Western Hemisphere.