The financial and technological ecosystem in El Salvador continues to evolve rapidly. Therefore, if your company is looking to operate in this sector, it is essential to understand the registration process for Digital Service Providers. Anyone interested in operating as a Digital Asset Service Provider (DASP) must apply for registration with the National Commission on Digital Assets (CNAD).
Below, at GOLD SERVICE, we explain in detail the requirements and the step-by-step process for complying with this legal regulation.
What are the registration steps?
To operate legally, the interested party must complete two essential steps. First, they must complete the initial step, known as “pre-registration.” Next, they must complete the second step, known as “final registration.”
Requirements for the Final Registration Form
To begin the second phase, the interested party must complete the final registration form for Digital Asset Service Providers (DASP). The following key information must be provided on the form:
1. Business Plan and Projections
The company must submit a business plan to be implemented in El Salvador over the next three years. This strategic document must include:
• An executive summary and a description of the business.
• The market strategy and financial projections.
• The Expense Budget and Key Performance Indicators (KPIs).
• The Risk Analysis and Mitigation Plan, along with Implementation and Monitoring.
2. Customer Service and Operational Transparency
In addition, it is essential to have documentation regarding the implementation of the “Customer Service/Customer Communication System.” To ensure transparency, the following must be detailed:
• The manner in which digital assets can be bought and sold on the platform or digital wallet managed or promoted by the digital asset service provider.
• The fees applicable to the transaction.
• A customer service policy that includes the channels and protocols of its customer service system in a consistent and efficient manner, in accordance with the nature of the services it will provide.
4. Security, Custody and KYC Protocols
Furthermore, technological integrity is vital. Security and Custody Policies and Procedures must be submitted. Technical requirements include:
• A detailed description of the policies and procedures for the secure custody of digital assets and fiat currencies.
• Information Security and Cybersecurity Policies to protect information and technological assets.
• The KYC (Know Your Customer) and KYB (Know Your Business) protocols, including a description of customer/business identification and verification procedures to prevent fraud and money laundering.
• The KYT (Know Your Transaction) protocol, which includes systems and processes for monitoring and analyzing transactions to detect suspicious activity.
5. Risk Management and Audits
Finally, the corporate structure must be prepared for any contingencies. The documentation must include:
• A Business Continuity Plan that describes the procedures and measures to be taken to ensure operational continuity in the event of a significant disruption.
• Information on internal and external audit processes, including frequency, scope, and auditing entities.
• Details on the geofencing technologies and policies used to restrict transactions in specific jurisdictions.
How is the application submitted to the CNAD?
After completing and submitting the form, the applicant must submit a copy of the form signed by the person authorized to process it. This document must also be submitted, along with the accompanying documentation, in hard copy at the Commission’s offices. Upon receipt, the Registration Department will issue a receipt for the form.
Do you need legal advice to register your company as a Digital Service Provider (DASP) in El Salvador?
At GOLD SERVICE, we have experts ready to guide you through every stage of this complex regulatory process. Contact us today at gold@goldservice.com.sv and ensure your business’s regulatory compliance!
