Fiat currency transactions
What rules and restrictions govern the exchange of fiat currency and cryptoassets?
Generally, there are no current restrictions for the exchange of fiat currency and cryptoassets.
However, to promote the proper functioning of payment systems, during 2018, the Mexican Central Bank modified the rules for participants in the Interbank Electronic Payments System (SPEI) to prevent unauthorised operations and to establish measures for the full identification of customers and operations related to payments made through the system when a sale of a virtual asset is involved.
To reduce the probability that virtual assets will be used as a channel for the extraction of resources resulting from cyberattacks or other illicit activities, the SPEI regulation was made to include transfers that are aimed at clients of participants who carry out these operations are credited after 24 hours. This increases the reaction time, if necessary, and allows participants to carry out additional validations to verify the legitimacy of the transfer.
This KYC and time rules only apply to participants in SPEI that carry out fund transfers related to clients who offer the professional and habitual exchange or sale of virtual assets.
Exchanges and secondary markets
Where are investors allowed to trade cryptoassets? How are exchanges, alternative trading systems and secondary markets for cryptoassets regulated?
Investors can trade cryptoassets within national or foreign exchanges. Exchanges, alternative trading systems, and secondary markets are regulated from an anti-money laundering and consumer-protection perspective. Regulation such as suspicious activity reports, KYC, cybersecurity, data protection, privacy policies, risk disclosures and consumer protection could apply to national exchanges and in some cases to foreign exchanges.
If cryptoassets are deemed securities, special authorisations may be required to operate exchanges, alternative trading systems and secondary markets.
How are cryptoasset custodians regulated?
Under Circular 4/2019 issued by Mexican Central Bank, financial institutions are prohibited from acting as custodians of virtual assets (a type of cryptoasset regulated by the Fintech Law). Besides financial entities, anyone can act as a custodian since there are no specific regulations yet.
How are cryptoasset broker-dealers regulated?
No specific laws are regulating cryptoasset broker-dealers.
Except for security tokens, where the regular brokerage regulation could apply, anyone can act as a crypto broker-dealer.
What is the legal status of decentralised cryptoasset exchanges?
There is no specific regulation applicable to decentralised cryptoasset exchanges.
What is the legal status of peer-to-peer (person-to-person) transfers of cryptoassets?
There is no specific legal status for this kind of peer-to-peer operations. General rules would be applicable to solve and regulate contracts entered into peer to peer.
Trading with anonymous parties
Does the law permit trading cryptoassets with anonymous parties?
There is no specific prohibition; therefore, it is permitted.
Are foreign cryptocurrency exchanges subject to your jurisdiction’s laws and regulations governing cryptoasset exchanges?
If a foreign exchange intends to operate actively within Mexico, they could be subject to Mexico’s laws and regulations.
However, there is no legal restriction for a Mexican citizen or resident to participate in foreign exchanges outside Mexico. Consequently, the foreign exchange does not necessarily have to comply with Mexican laws just because they have a Mexican user.
Under what circumstances may a citizen of your jurisdiction lawfully exchange cryptoassets on a foreign exchange?
There are no current restrictions for Mexicans citizens to lawfully exchange cryptoassets outside Mexico.
Do any tax liabilities arise in the exchange of cryptoassets (for both other cryptoassets and fiat currencies)?
Currently, Mexico has no specific tax framework for cryptocurrencies. However, it is expected that there will be one in the future.
The lack of explicit regulation does not imply that taxes should not be paid for gains and losses or that value added tax is not applicable.
Since the tax authority has no position, most experts are inclined to consider cryptoassets as intangible assets for tax purposes.
As an intangible asset, all transactions…