PANAMA Law and Practice Contributed by: Teresa Carballo and Edgar Young, Pacifica Legal
The SMV currently operates within a legal framework that does not create a specific licence for crypto-asset businesses. This creates an important asymmetry. On the one hand, an unregulated company may be able to carry out certain crypto-related activities in Panama if those activities do not fall within a regulated category. On the other hand, an entity already regulated by the SMV cannot simply use its securities licence to han- dle crypto-assets for clients. For example, a licensed brokerage house could not, under the current frame- work, execute crypto-asset purchase or sale orders, custody crypto-assets. This is why regulated entities often view the current position as commercially une- ven: activities that may be performed by an unregu- lated technology or crypto company may be restricted for a licensed securities-market participant precisely because that participant is subject to the SMV’s regu- latory perimeter and permitted-activity rules. The core issue is therefore not that crypto is prohibited, but that the current securities legislation does not yet provide a clear licensing category for crypto-asset services, while regulated entities remain limited to the activities expressly permitted under their existing licences. The SBP supervises banks, banking groups and fiduciary entities. It has stated that cryptocurrency exchange, investment, purchase, sale and commer- cialisation activities are not specifically regulated and fall outside its direct supervisory scope. However, banks must still apply due diligence and manage the risks of misuse of their platforms. The Financial Analysis Unit, or UAF, is Panama’s finan- cial intelligence unit for anti-money laundering, coun- ter-terrorist financing and counter-proliferation financ- ing matters. It is not a licensing authority for crypto businesses, but it is highly relevant because Panama is preparing for FATF-driven virtual-asset controls. The UAF has expressly referred to the need to prepare for virtual-asset regulation in light of the Financial Action Task Force, or FATF, standards. The Superintendency of Non-Financial Subjects, or SSNF, supervises listed non-financial obligated sub- jects for anti-money laundering purposes. It does not regulate crypto businesses merely because they use
crypto, but it may be relevant if the activity also falls into a supervised non-financial sector, such as casi- nos, betting, real estate, precious metals or certain professional services. The Junta de Control de Juegos, Panama’s gambling regulator, is relevant where a blockchain product involves games of chance, betting or activities that originate bets, including online or distance-based for- mats. It is not a crypto regulator, but it may be critical for prediction-market, gaming or wagering models. The National Authority for Transparency and Access to Information, or ANTAI, is relevant for data protection. Blockchain businesses that process personal data must consider Panama’s data privacy framework, including access, rectification, cancellation, opposi- tion and portability rights. Panama’s strongest alignment is with FATF, especially on anti-money laundering and beneficial ownership. Panama was removed from the FATF grey list in 2023, and the government has continued to focus on strengthening its AML/CFT framework. FATF Recom- mendation 15 applies AML/CFT standards to virtual assets and VASPs, and Panama is expected to move toward clearer VASP regulation, although a dedicated VASP law is not yet in force. On IOSCO, the International Organization of Secu- rities Commissions, the SMV participates in IOSCO work and follows an approach broadly consistent with “same activity, same risk, same regulatory outcome”. However, Panama has not yet adopted a comprehen- sive IOSCO-style crypto market framework. Instead, the SMV uses existing securities law and administra- tive opinions to assess whether a digital-asset activity falls within its perimeter. On BIS, the Bank for International Settlements, and Basel Committee standards, Panama has not pub- licly adopted a crypto-specific prudential regime for bank crypto exposures equivalent to the Basel crypto- asset standard. In practice, BIS standards are most relevant indirectly, through bank risk appetite, pruden- tial supervision and conservative treatment of crypto exposure by regulated financial institutions.
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