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Central Bank of Argentina Scrutinizes Companies Offering ‘Extraordinary Returns’ on Crypto Asset Investments

The Central Bank of Argentina has announced it is making inquiries regarding cryptocurrency investment companies. Specifically, the bank stated they are investigating companies that are offering extraordinary returns with cryptocurrency investments, which are not reasonable. These companies could be operating as Ponzi schemes, according to the bank, and it is currently examining the possibility of taking legal action against them.

Central Bank of Argentina Investigates Crypto Investment Companies

The Central Bank of Argentina issued a statement yesterday explaining the actions they are taking against some cryptocurrency investment companies. The institution announced it is scrutinizing some companies that offer “returns through operations with crypto assets and cryptocurrencies that are not compatible with reasonable parameters in financial operations.” The bank is also alerting users about the use of these platforms whose performance and investment risk cannot be evaluated by the institution.

The bank has already taken action against these companies in some regions of the country, inspecting them through the Superintendency of Financial and Exchange Entities, issuing cease and desist orders on these activities. The bank will now exert judicial action against the administrators of these companies.

Concentrated Activities

Some of these suspected operations have concentrated their efforts in specific provinces of the country, using publicity campaigns as a hook to pull in more investors. The Central Bank of Argentina detected such activity in two provinces, La Rioja and Catamarca, that aimed to gain followers to participate in “non-transparent asset management schemes.”

Cryptocurrency-related scams are not new to Argentina, but have multiplied this year. The NGO Bitcoin Argentina warned against this type of scheme earlier this year, noting that such groups are taking advantage of the popularity of crypto assets in the country. At that time, Javier Madariaga, CEO of the organization, stated:

We are seeing that pyramidal or Ponzi schemes with crypto are being repeated in different provinces of the country, and the common denominator of these scams is an intermediary that promises a great economic return by making a capital contribution, something that is not guaranteed in any investment .

Regarding these operations, the Central Bank of Argentina has also started to take action to control the rise of these activities. The institution revealed that it is now contacting these companies to ask them not to perform investment activities, and is analyzing whether to take legal action against the alleged Ponzi schemes.

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