- The legislative reform sets new standards for data protection and storage, aiming to bolster the business climate and attract foreign investment.
- The law increases penalties for data misuse, enhancing the security of personal and financial information for Bitcoin and other cryptocurrency users.
In a significant legislative update, El Salvador’s National Assembly has unanimously approved an amendment to the Special Law Against Computer Crime and Related Crimes. This reform, championed by the deputies of the Nuevas Ideas party founded by President Nayib Bukele, aims to fortify the legal framework surrounding the self-custody of Bitcoin and other cryptocurrencies.
Legislative Details and Implications
The amendment introduces stringent criminal penalties for illegal activities facilitated by technological means, including the manipulation and misuse of data by corporations, third parties, or intermediaries. Specifically, it expands the scope of computer fraud crimes, establishing severe punishments of up to 12 years in prison for those who exploit their legitimate access to databases to perform unlawful acts.
This legal adjustment directly impacts the Bitcoin ecosystem by minimizing the risk of unauthorized access to personal and financial data, thus promoting a safer environment for individuals opting to manage their cryptocurrencies independently. Self-custody of digital assets is a critical aspect of the cryptocurrency philosophy, emphasizing user autonomy over governmental and institutional controls.
Additionally, the reform outlines new definitions for roles involved in information management, such as data owners, custodians, controllers, and processors. Under the new law, data owners are legally entitled to have their data “correct, accessible, and protected from unauthorized use,” while other stakeholders must manage, protect, and process this information in accordance with legal standards.
Broader Impact on the Cryptocurrency Sector
The legislative changes also extend to cryptocurrency service providers, including exchanges and digital wallets, which handle large volumes of sensitive user data. These entities are now subject to stricter scrutiny under the revised law. Illegal activities identified under this legislation include altering transactions or balances in digital wallets, concealing or falsifying information, and selling personal data by employees of these companies.
The reform of the Special Law Against Computer and Related Crimes encompasses
“services based on blockchain technologies,”
signifying a comprehensive approach to regulating the Bitcoin ecosystem.
This places El Salvador among the nations with the most thorough cryptocurrency regulations, promoting widespread adoption of Bitcoin.
By implementing these legislative changes, the Salvadoran government, led by President Bukele, seeks to provide legal certainty for individuals, businesses, and investors while ensuring the protection of personal data. This move is part of a broader strategy to enhance the business climate and create an environment conducive to investment.
As outlined by Clarissa Valdebrán, the Investment Director of the Ministry of Economy, these reforms are designed to boost the nation’s attractiveness to domestic and international investors, safeguarding their operations and enhancing overall economic growth.
