CHILE Law and Practice Contributed by: Alberto Alcalde, María Catalina Zegers García-Huidobro and Pía Robledo, Puga Ortiz
10.9 Decentralised Finance (DeFi) DeFi services are regulated based on the underlying activity (trading, custody, or intermediation) regard - less of their decentralised structure. If a DeFi platform facilitates activities involving financial instruments or virtual financial assets, it must register in the FSPR and obtain CMF authorisation. Claims of exemption due to lack of traditional intermediaries are invalid under the Fintech Law. Platforms are considered ser - vice providers and must comply with governance, risk management and AML/CTF reporting obligations (to the UAF). Regulatory focus remains on transparency, risk disclosure and addressing vulnerabilities like mar - ket manipulation or cybersecurity flaws within smart contracts. 10.10 Regulation of Funds Funds that invest in blockchain assets, whether par - tially or entirely, are regulated under the General Funds Management Law and other applicable laws in Chile. Funds investing in blockchain assets, such as crypto - currencies, security tokens or other blockchain-based financial instruments, are subject to this framework. Blockchain assets are considered financial assets if they generate monetary returns or represent debt or virtual financial assets. Fund managers must register with the CMF, and each fund must also be registered before being offered to the public. Authorisation from the CMF is required before operations. Fund managers must: • implement governance, risk management and cybersecurity measures to protect investors and ensure operational continuity; • maintain minimum capital equivalent to the greater of USD200,000 or 3% of risk-weighted assets; and • disclose risks, characteristics and conditions of blockchain assets to investors – misleading or incomplete information is prohibited. Fund managers investing in blockchain assets are subject to AML/CTF regulations and must report sus - picious transactions to the UAF. If automated systems are used for investment decisions, managers must demonstrate their reliability and inviolability to the CMF. Fund managers must also provide guarantees
to ensure compliance with obligations and protect investors. Blockchain assets held by funds must be segregated and securely maintained to prevent misuse or unau - thorised access. 10.11 Virtual Currencies Virtual currencies and blockchain assets are defined and treated differently based on their characteristics Virtual currencies represent digital units of value, goods or services, excluding money (whether in national or foreign currency). They can be transferred, stored or exchanged digitally. Virtual currencies are treated as digital representations of value but are not considered money. They are sub - ject to regulations when used in financial services, such as custody, trading or investment platforms. Virtual currencies are excluded from the definition of financial instruments unless explicitly structured as such. Blockchain Assets Blockchain assets defined as financial instruments include titles, contracts and intangible assets designed to generate monetary returns or represent debts or vir - tual financial assets. Blockchain assets may include security tokens, derivatives, contracts for difference and other financial instruments. and intended use. Virtual Currencies Blockchain assets are treated as financial instruments if they are designed to generate monetary returns or represent debts or virtual financial assets. They are subject to stricter regulations, including registration, authorisation, and compliance with governance and risk management requirements. 10.12 NFTs NFTs and NFT platforms may fall within the fintech regulatory perimeter depending on their characteris - tics and intended use cases.
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