SMV Confirms Non-Custodial Crypto Platforms Remain Outside Securities Regulation

On 25 August 2025 the Panamanian Superintendencia del Mercado de Valores (SMV) issued Opinion No. 04-25, providing critical clarity for firms operating in the burgeoning digital asset space. The opinion analyzed a business model involving the non-custodial custody and exchange facilitation of cryptocurrencies, specifically Bitcoin (BTC) and Ethereum (ETH).

The SMV confirmed that the activities surrounding cryptocurrencies escape the SMV’s jurisdiction. Under the current Securities Market Law (Decreto Ley 1 de 8 de julio de 1999), BTC and ETH are not considered securities or financial instruments. As a result, the SMV concluded that a company operating this type of non-custodial platform does not require a license, registration, or special authorization from the SMV.

This conclusion is based on the legal definition of the products supervised (securities, financial instruments, and Forex) and the company’s non-custodial structure, where the user retains total control over their assets.

Conversely, the opinion highlights that licensed Panamanian brokerage houses (casas de valores) are explicitly prohibited from engaging in investment or custody activities related to cryptocurrencies on behalf of clients, as these are not authorized investment products.

While the opinion provides regulatory relief for certain non-custodial operations, the SMV acknowledges that the national legal framework is outdated concerning digital assets. The authority recognizes the need for legislative updates to ensure security, define asset nature, and establish clear supervisory competencies, aligning with evolving global standards (IOSCO, GAFI). We advise clients to monitor forthcoming legislative developments closely.