TRM Labs: While Risks Remain, Compliance Advances in Latam
Key Takeaways:
TRM Labs states that the threats are well-documented in the region, including flows linked to the Sinaloa Cartel, leveraging local brokers and P2P exchanges to launder funds using Chinese organizations as intermediaries to process over $103 billion in 2025 alone.
In addition, the institution highlighted that sanctions that remain in place related to illicit oil movements and drug trafficking keep Latam in the enforcement spotlight. Nonetheless, governments are moving quickly to plug these holes and strengthen compliance across the sector.
In Brazil, new regulations passed in February establish a compliance framework that includes new anti-money laundering (AML) and terrorism financing (TF) requirements for virtual asset service providers (VASPs) to receive authorization to operate.
Argentina also tightened oversight over the crypto market, with updated registration requirements for VASPs that include AML rules, audit, and asset segregation requisites.
Mexico also introduced risk-based assessments, designated compliance officers, and periodic compliance audits for entities, as virtual asset activities are still confined to organizations approved by the Central Bank of Mexico (Banxico).
TRM Labs concluded that “for exchanges, fintechs, and financial institutions operating in Latin America, regulatory requirements are arriving across the region simultaneously. Institutions building compliance infrastructure ahead of enforcement deadlines carry a clear operating advantage.”
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