Key Takeaways:
- Colombia has approved new regulations requiring users and exchanges to report cryptocurrency transactions exceeding a certain amount.
- Resolution 314 establishes that cryptocurrency transactions over $150, or cryptocurrency transactions made with multiple tokens whose value goes over $450, will have to be reported to the UIAF.
- This new regulation will go into effect from April 1st 2022.
- The new regulation aims to increase control over what is happening with cryptocurrency assets in the country.
Colombia has approved new regulations requiring users and exchanges to report cryptocurrency transactions exceeding a certain amount. Resolution 314 establishes that cryptocurrency transactions over $150, or cryptocurrency transactions made with multiple tokens whose value goes over $450, will have to be reported to the UIAF, the anti-money laundering watchdog in Colombia.
The reports that this resolution deals with will begin to be sent as of April 1, 2022. The new regulation aims to increase control over what is happening with cryptocurrency assets in the country. It also aims to prevent possible money laundering and terrorism financing activities from going undetected by leveraging these assets.
In this regard, the resolution states that “Virtual assets have created a situation that merits the intervention of the UIAF, to the extent that, although they are operations that in Colombia are not illegal by themselves, they can lend themselves to illicit activities, due to the anonymity or pseudonymity in the transactions using them.”
All regulated entities must report monthly to the UIAF within the first twenty (20) calendar days of the following month, individual and multiple transactions carried out on virtual assets. In addition, exchanges will also be required to issue a report of suspicious transactions, which will provide the UIAF with a detailed list of operations deemed unusual and the users who were affected by them.
It even stated that failure to comply with the provisions of this administrative act would give rise to the imposition of the respective fines and other administrative sanctions by the Superintendency of Companies or the respective supervisory body, without excluding the administrative or criminal actions that may take place.
The law also establishes penalties for exchanges and individuals who fail to follow these directives. If money laundering is discovered in these activities, noncompliant users will be fined between 100 and 400 minimum monthly wages, in addition to other penalties resulting from these crimes.
According to Resolution 314, the national bitcoin market recorded $124 million in transactions in 2019, nearly 1.7 times the amount recorded in 2018. Because of the newfound liquidity in these markets, the government was concerned about using these assets for illegal purposes.
The crypto oversight of the institutions in Colombia has also reached the tax environment. The DIAN, the country’s tax regulator, recently announced that it was taking steps to detect tax evasion related to the use of cryptocurrencies for trading or transacting.
