Money Laundering in Crypto-Assets: Ecuadorian Notarial Regulation Challenges (Ciencia y Educación)

Summary

• Property and mercantile registrars were incorporated as obliged entities under Resolution No. UAF-DG-2011-0062.p.10
• The Financial Action Task Force defined virtual assets in its 2019 guidance as digital representations of value that can be digitally traded or transferred.p.5
• Regulation (UE) 2024/1624 integrated crypto-asset service providers into the European anti-money laundering preventive system.p.12
• Mexico established regulatory controls over virtual asset operations through its Fintech Law and Banco de México Circular 4/2019.p.12

Key insights

1. Existing notarial due diligence mechanisms in Ecuador were not specifically designed for transactions involving crypto-assets.p.2
2. The absence of specific regulation in Ecuador creates legal uncertainty when transaction payments involve digital assets.p.3
3. Distributed ledger technology enables protocol networks to manage decentralized databases without relying on a single central server.p.6
4. Blockchain pseudonymity connects operations to public keys or digital addresses rather than direct civil identification data.p.6
5. The anti-money laundering preventive role of Ecuadorian notaries stems from statutory collaboration requirements rather than traditional notarial public faith.p.10
6. Determining the true beneficial owner and verifying the origin of funds pose significant challenges when crypto-wallets are used in notarial acts.p.11
7. Spain subjects crypto-to-fiat exchange providers and electronic wallet custodians to anti-money laundering obligations under Law 10/2010.p.12