The Argentine Securities Commission (CNV) has recently approved General Resolution 1058, establishing regulations for Cryptocurrency Asset Service Providers (PSAVs). The objective of this regulation is to ensure transparency, stability, and user protection within the cryptocurrency ecosystem.

Dr. Alfredo Muñoz García, a specialist in digital assets, AI, and tokenization with a doctorate from the Complutense University of Madrid, states that this regulation has sparked several criticisms, which he refers to as "worrisome."

Muñoz García, in a post on his official LinkedIn account, stated that as stipulated by Law 27,739, which "legalized PSAV regulation with the CNV, following the mandate set out in the law, the supervisory body has established a legal framework to demand and guarantee the requirements of transparency, stability and protection of users of crypto services, through prior consultation."

"This is done through an order of obligations in terms of registration, minimum net worth, procedural manual requirements, cybersecurity, information security policies, asset custody and prohibition of the use of own accounts, annual audits of systems, anti-money laundering, codes of conduct, operational due diligence, advertising control or risk disclosure, among others," explained the academic.

Prohibitions for those who do not comply with the law
Muñoz details in his post that "the regulation prohibits the provision of services to all those subjects who have not been previously registered in the registry created for this purpose, but it has left out, among others, decentralized protocols that provide services with virtual assets, except in cases where there are no identifiable service providers."

The regulation establishes five categories of Virtual Asset Service Providers (PSAVs):

Exchange between primary virtual assets (AVs) and legal tender.
Exchange between virtual assets.
Transfer of virtual assets.
Custody and administration of virtual assets.
Participation and provision of financial services related to the offer and sale of virtual assets by an issuer.
Advantages of the new law regarding PSAV regulation
"One of the best points that the regulation presents is the establishment of a custody regime that obliges the segregation of virtual assets of third parties, preventing them from being computed in their own accounts or as net worth and that the contracts with clients must establish the legal regime of the deposits. This regime is extendable even to sub-custodians," explains the expert.

This means that General Resolution 1058 requires companies that hold virtual assets of others to keep those assets separate from their own funds. They cannot be counted as their own or included in their accounts. Contracts with customers must clearly state how these assets are being held. This rule also applies if they use another company to help with custody.

However, Muñoz adds, "This regulation suffers from a serious problem that comes from Law 27,739, which only regulates PSAVs and not virtual assets, their offers, the information that must accompany them or the market for this type of assets," which has led the supervisory body itself to include an express warning about this.

Regulating PSAVs without controlling the information offered about virtual assets and without supervising the markets where they are traded can create the false expectation that these investment products and markets are under supervision and have guarantees similar to those of the securities market.

The academic concludes by mentioning that "This regulation would not have prevented the well-known case of $Libra. It is necessary but not sufficient, and the CNV is very skilled at warning about its limitations."

The $Libra Case: A Brief Summary
Recall the launch of Libra ($LIBRA), the token of a project briefly promoted by Argentine President Javier Milei on X in mid-February of this year, which ended in a financial debacle after insiders withdrew more than $107 million, eliminating almost 94% of the token's value in a matter of hours.

According to on-chain intelligence firm Lookonchain, at least eight wallets linked to the Libra team extracted liquidity from the token, securing $57.6 million in USD Coin (USDC) and 249,671 Solana (SOL), worth $49.7 million.

Dexscreener data shows that the Libra token briefly surged to a peak market capitalization of $4.56 billion at 22:30 UTC on February 14, only to plummet by over 94% to its current market cap of $257 million, just 11 hours after the token began trading on decentralized exchanges.

PSAVs: Final Regulations
As previously published by Cointelegraph en Español, "The regulations define principles and parameters that govern PSAVs, including general rules of conduct and specific conditions for the development of their functions. It also establishes an initial framework for the application of information security policies, prudential requirements for the custody of virtual assets, segregation of accounts, reporting obligations regarding contracts with third parties and customer references, among other aspects."

The regulations also seek to ensure transparency and disclosure of risks associated with virtual assets to protect users. Likewise, the regulations include an information regime applicable to PSAVs during their permanence in the registry and the capital requirements they must comply with.

With the implementation of these new regulations, those involved in the cryptocurrency ecosystem may:

Operate those who meet the requirements and are registered in the PSAV registry.
Delegate specific functions to third parties, with the full responsibility of the registered PSAV, with headquarters in the country or abroad.
Enter into contracts with registered agents of the capital market (with conditions) and with third parties to make customer referrals.
According to the publication made through the Argentine government page, the full regulation will enter into force on December 31, 2025.