Puerto Rico Compliance Report

Generated 2026-09-22

Partially Regulated

Regulatory Overview

Regulatory Status: Some rules exist but significant gaps; draft legislation or limited guidance
Key Regulator(s): Securities and Exchange Commission, Commodity Futures Trading Commission, Puerto Rico Securities Commission
Primary Legislation: This is a PDF version, not an official government URL, but frequently linked by law firms, search for Act 13 of 2020, Act No. 273 of December 29, 2012, as amended, search for Act 273 of 2012
Travel Rule: Adopted — Threshold: $3,000
Tax Reporting: U.S. Federal Tax Applicability: As a U.S. territory, individuals and businesses in Puerto Rico are generally subject to U.S. federal tax laws, including IRS guidance on virtual currency, although there are specific exemptions (e.g., U.S. citizens who are bona fide residents of PR are generally exempt from U.S. federal income tax on PR-sourced income, but still file U.S. federal returns for non-PR income and certain disclosures).. Puerto Rico's Own Tax Code: Puerto Rico has its own separate tax system (Código de Rentas Internas de Puerto Rico) administered by the Department of the Treasury (Hacienda).. Act 60 (Puerto Rico Incentives Code): This legislation, particularly its Subtitle B (Export Services) and Subtitle C (Individual Resident Investors), offers significant tax incentives that are highly relevant to crypto investors and businesses that relocate to or operate in Puerto Rico.. For General Puerto Rico Residents (Not under Act 60):. Capital gains from the sale or exchange of cryptocurrency are generally treated as ordinary capital gains under the Puerto Rico Internal Revenue Code.

Key Facts

aml Bank Secrecy Act (BSA) (31 U.S.C. § 5311 et seq.): This is the foundational AML legislation in the U.S. It requires financial institutions (including MSBs/VASPs) to keep records and file reports on certain financial transactions. FinCEN Regulations (31 CFR Chapter X): FinCEN, a bureau of the U.S. Department of the Treasury, issues regulations implementing the BSA. Guidance on Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies (FIN-2013-G001, March 18, 2013): This initial guidance clarified that exchangers and administrators of virtual currency are "money transmitters" under the BSA. Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies (FIN-2019-G001, May 9, 2019): This updated guidance broadened the scope, clarifying that various VASP models (e.g., peer-to-peer exchangers, DApps, anonymity-enhanced coin providers) may also be MSBs. Interpretive Ruling on the Application of the BSA to Mixed-Currency Transactions and Other Related Transactions (FIN-2023-R001, October 26, 2023): Clarifies that transactions involving both fiat currency and CVC are covered by BSA requirements. FATF Standards: While not direct legislation, the U.S. is a member of the Financial Action Task Force (FATF), and FinCEN's guidance is designed to align with FATF recommendations, particularly Recommendation 15 which specifically addresses new technologies and the "Travel Rule" for VASPs. Puerto Rico Money Services Business Act (Act No. 17-2016): This act regulates money services businesses in Puerto Rico, including licensing, examination, and enforcement. VASPs operating as money transmitters in Puerto Rico are typically required to obtain a license under this Act and comply with its provisions, which include AML program requirements. Office of the Commissioner of Financial Institutions (OCFI) Regulations: OCFI issues regulations and circular letters to implement Act 17-2016 and other financial laws, which would apply to licensed entities, including VASPs.
enforcement Required License: Money Transmitter License (MTL) from the OCFI. Reasoning: When an exchange facilitates the exchange of fiat currency for virtual assets, or vice-versa, it is performing a money transmission service by accepting funds (fiat or virtual assets) from one party and making them available to another, or transmitting funds on behalf of consumers. FinCEN: Also requires MSB registration (as a money transmitter) with FinCEN. Required License: The application of the Money Transmitters Act to purely crypto-to-crypto exchanges can be a grey area in some jurisdictions. However, OCFI, like many other U.S. state regulators, generally takes a broad interpretation that if the virtual assets are considered "value" or "funds" and the entity facilitates their transfer for others, an MTL is likely required. It is best practice to assume an MTL is needed or seek specific guidance from OCFI. FinCEN: FinCEN's guidance explicitly states that exchangers of convertible virtual currency (even crypto-to-crypto) are MSBs and must register as such. Required License: If a custody provider holds virtual assets on behalf of others and facilitates their transfer or makes them available to others, they are generally considered to be performing a "money transmission" function. Therefore, an MTL from OCFI is typically required. FinCEN: Entities that act as custodians of virtual currency, facilitating transfers for others, are generally considered "administrators" or "exchangers" under FinCEN guidance and must register as an MSB. Required License: Payment processors that handle virtual assets (e.g., converting crypto payments into fiat for merchants, or vice-versa) are clearly engaged in money transmission. An MTL from OCFI is required.
general Cryptocurrency exchanges operating in Puerto Rico must comply with U.S. regulations, including Anti-Money Laundering (AML) and Know Your Customer (KYC) policies The OCIF has authority to license and regulate digital asset custody and settlement services, as demonstrated by its authorization to FV Bank in November 2022 The OCIF has taken enforcement action against unregulated cryptocurrency operations; for example, it ordered Athena to cease cryptocurrency operations until obtaining proper licensing after unregulated Bitcoin ATMs (BATMs) were linked to irregular transactions Entities must maintain a minimum net worth of $500,000 USD to qualify for the exemption under § 882. Adequate reserve coverage (e.g., 30% of digital asset holdings in regulated bank accounts) is recommended to mitigate market volatility risks. Regulatory Ambiguity: Interpretation of § 882 exemptions for novel digital assets remains evolving. Technological Integration: Ensuring real‑time compliance monitoring with blockchain data feeds is essential yet underdeveloped. Cross‑Border Transactions: Navigating differing tax treaties when serving international clients poses uncertainty.
licensing Office of the Commissioner of Financial Institutions (OCIF): Responsible for licensing and regulating money services businesses (MSBs) and digital asset custody services Department of Economic Development and Commerce (DDEC): Created its own regulatory framework in February 2023, extending Act 60 tax exemptions to blockchain-related ventures Puerto Rico Department of the Treasury (PRDT): Involved in tax compliance and IRS guideline implementation An investment of money (or other value): The investor contributes capital or other valuable consideration. For crypto, this is typically the purchase of tokens with fiat or other cryptocurrencies. In a common enterprise: The fortunes of the investor are interwoven with those of the promoter or a third party, or with those of other investors. This can be horizontal (pooling of funds among multiple investors) or vertical (investor's success tied to the promoter's efforts). With an expectation of profit: The investor is motivated by the prospect of financial returns, rather than merely consuming a good or service. This profit can be in the form of capital appreciation, dividends, or other returns. To be derived solely (or primarily) from the efforts of others: The investor does not contribute significantly to the management or operational success of the enterprise; instead, they rely on the entrepreneurial or managerial efforts of the promoter or a third party. The "solely" has been interpreted broadly by courts as "primarily." Puerto Rico Uniform Securities Act (Law No. 60-2020), Article 1.102(28): Defines "security" to include, among other things, "investment contract." This broad definition allows OCIF to apply the Howey Test framework to novel instruments like cryptocurrency tokens.
securities FINRA: Oversees broker-dealers, including those operating in Puerto Rico. Website: https://www.finra.org/ SEC (Federal): Provides supplementary oversight for securities issued in Puerto Rico. Puerto Rico Securities Act (Ley 169 de 2016): Imposes civil liability for securities fraud, including untrue statements and omissions of material facts. Source Uniform Application to Register Securities (Form U1): Required for registration in Puerto Rico. Accepts electronic signatures. Issuance and sale of digital assets classified as securities. Operation of a broker-dealer engaged in trading these assets. Customer Due Diligence (CDD): Identifying beneficial owners and assessing risk levels. Enhanced Due Diligence (EDD): Required for higher-risk customers.
stablecoin No specific PR classification: Puerto Rico does not have a unique classification (e.g., "e-money," "payment token," "security") specifically for stablecoins in its local statutes. Federal U.S. Classification (likely applied in PR): Securities (SEC): A stablecoin could be classified as a security if it meets the criteria of an "investment contract" under the Howey Test. This is more likely for algorithmic stablecoins or those that promise an expectation of profit from the efforts of others. The SEC has emphasized a "facts and circumstances" approach. Reference: SEC's "Framework for 'Investment Contract' Analysis of Digital Assets" (April 2019). While not a rule, it outlines the SEC's analytical approach. Commodities (CFTC): Some digital assets, including potentially certain stablecoins, could be viewed as commodities by the Commodity Futures Trading Commission (CFTC) if they are traded in interstate commerce. Reference: CFTC Digital Assets Information: https://www.cftc.gov/LawRegulation/DigitalAssets/index.htm Money Transmitters/Convertible Virtual Currencies (FinCEN): Stablecoins are widely considered "convertible virtual currencies" (CVCs) by the U.S. Financial Crimes Enforcement Network (FinCEN). Entities involved in the business of exchanging, administering, or transferring CVCs, including stablecoins, are typically considered "money transmitters" and fall under the Bank Secrecy Act (BSA) and FinCEN regulations, requiring registration as Money Services Businesses (MSBs). This applies in Puerto Rico. Reference: FinCEN Guidance FIN-2019-A003, "Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Convertible Virtual Currencies" (May 2019).
tax U.S. Federal Tax Applicability: As a U.S. territory, individuals and businesses in Puerto Rico are generally subject to U.S. federal tax laws, including IRS guidance on virtual currency, although there are specific exemptions (e.g., U.S. citizens who are bona fide residents of PR are generally exempt from U.S. federal income tax on PR-sourced income, but still file U.S. federal returns for non-PR income and certain disclosures). Puerto Rico's Own Tax Code: Puerto Rico has its own separate tax system (Código de Rentas Internas de Puerto Rico) administered by the Department of the Treasury (Hacienda). Act 60 (Puerto Rico Incentives Code): This legislation, particularly its Subtitle B (Export Services) and Subtitle C (Individual Resident Investors), offers significant tax incentives that are highly relevant to crypto investors and businesses that relocate to or operate in Puerto Rico. For General Puerto Rico Residents (Not under Act 60): Capital gains from the sale or exchange of cryptocurrency are generally treated as ordinary capital gains under the Puerto Rico Internal Revenue Code. Short-term capital gains (assets held for one year or less) are typically taxed at ordinary income tax rates. Long-term capital gains (assets held for more than one year) are generally subject to a preferential flat tax rate. As of recent years, this has often been 15%. However, individuals must consult the most current tax tables and rules from the Puerto Rico Treasury. For Act 60, Subtitle C (Individual Resident Investors) Grantees:
travel rule FinCEN Guidance (May 2019): Application of FinCEN's Regulations to Certain Business Models Involving Convertible Virtual Currencies (FIN-2019-A003) FinCEN Advisory (October 2020): Advisory on Illicit Activity Involving Convertible Virtual Currency (FIN-2020-A005) For transfers between financial institutions (VASPs), the Travel Rule requires the transmittal of specific originator and beneficiary information for transactions greater than $3,000. FinCEN has also clarified that for transactions involving a VASP and an unhosted wallet (or person-to-person transfer), additional record-keeping requirements apply for transactions greater than $3,000. Exchangers: Businesses that accept and transmit convertible virtual currency or buy and sell CVC for fiat currency or other CVCs. Administrators: Businesses that put CVC into circulation and have the authority to redeem it. Essentially, any business that provides services for transferring or exchanging virtual assets on behalf of a customer, similar to the FATF's definition of a VASP. This includes exchanges, brokers, and certain wallet providers. Civil Monetary Penalties: Fines of thousands or even millions of dollars, depending on the nature and severity of the violation.

Sources

This report is AI-generated from publicly available regulatory sources. Last updated: 2026-09-21. View full profile