Argentina Has the Highest Crypto Adoption Rate in the Western Hemisphere, But It Doesn\'t Use the Most Trustworthy Exchanges

A Forbes analysis found the country, with a 276% inflation rate, has the highest crypto adoption rate in the Western Hemisphere, but little use of the most trustworthy exchanges.

Argentina has the highest crypto adoption rate in the Western Hemisphere, a Forbes analysis found, despite the country’s 276% inflation rate and lack of regulation for the digital currency industry.

A country analysis by SimilarWeb found that Of 130 million visitors to 55 of the largest exchanges worldwide, 2.5 million came from Argentina, a proxy for usage. But while stablecoins such as tether might seem like a perfect escape hatch from Argentina’s inflationary woes, they come with their own set of risks.

The country has not created any regulations to reign in this wild industry, and the world’s most-trustworthy exchanges and marketplaces (as rated by Forbes) are not the choices most widely used by Argentinians.

Argentina’s crypto adoption is higher as a percentage of its global population than any other country in the Western hemisphere. Of 130 million visitors to 55 of the largest exchanges worldwide, 2.5 million came from Argentina, according to a Forbes study of website data from Similarweb. Additionally, in a report late last year, crypto data analytics firm Chainalysis indicated that Argentina “leads Latin America in raw transaction volume with an estimated $85.4 billion in value received” up to July 2023.

However, their token of choice, USDT, has a complicated history. British-Virgin Island-domiciled Tether guards its internal workings, has never produced an audit and does not disclose which banks it uses. In 2021 the CFTC and the New York Attorney General forced Tether to pay fines of $41 million and $18.5 million respectively for falsely claiming among other things that USDT was backed by U.S. dollars one-for-one. None of these red flags seem to cause customers much concern in a country still reeling from triple-digit inflation.

The risks extend to the exchanges and marketplaces servicing Argentina as well. When Forbes identified the 20 most trustworthy crypto exchanges in the world in May, none of the top five crypto providers in Argentina – Binance, eToro, BingX, HTX and Bitget – were included because of poor internal controls and lack of domestic regulatory oversight. Binance, which has by far the most visited exchange website in the year to March, received more traffic from Argentina than any other nation and does not even have a home-country regulator, let alone a local one.

How risky is doing business with Binance? We know it pleaded guilty to violating U.S. money-laundering rules and to doing business with criminals and alleged terrorists, although the exchange’s $4.3 billion settlement required the acceptance of long-term monitoring to prevent recurrences.

But that is not all. Prior investigations into Binance by Forbes have also revealed that clients can’t always fully rely on balances in their online cryptocurrency wallets since the final word on what they hold comes from the company’s internal books, which are not visible to the public. There have also been incidents when the company has moved funds to collateralise its stablecoins that it issued outside of the exchange. In Binance’s favor, however, it has not fallen into insolvency, has mostly been able to process customer withdrawals, and remains in operation.

It is difficult for ordinary Argentinians, or any other novice investors, to understand and appreciate these risks. Fernando Apud, an Argentine software engineer living in the country’s northern Tucuman province, recently evaluated sites like Cocos Capital, a local firm, and the much larger and sophisticated Binance website. While the sites touted security and convenience as big selling points, he found that even the larger ones like Binance were evasive about disclosing basic information such as whether they were registered to do business in Argentina and the name of the entity that would hold his investments.

When Forbes asked Rose Zimler, with Binance’s Spanish-speaking communications team, about Binance’s status in the country she indicated that the company was “in close contact with authorities” but had not registered in Argentina. She would not give a reason as to why not or whether it intended to do so. She did say that it holds 18 licenses around the world.

Binance is not alone. None of Argentina’s other top crypto exchanges have registered with the Comision Nacional de Valores (CNV), the national securities regulator. They typically suggested to Forbes that they deserve customer trust because of their operating histories. Pablo Monti, a brand ambassador from BingX, on behalf of the exchange’s communications team, declined to specify the nature of the platform’s regulatory compliance in Latin America but told Forbes on May 20: “BingX is further expanding into Argentina and other countries like Turkey and Vietnam as a result of our 6th anniversary as a company.”

At eToro, a company spokesman did not address the lack of registration. Still, she said: “As a business which is regulated by financial authorities in multiple jurisdictions around the

The above is the detailed content of Argentina Has the Highest Crypto Adoption Rate in the Western Hemisphere, But It Doesn\'t Use the Most Trustworthy Exchanges. For more information, please follow other related articles on the PHP Chinese website!