Colombian Watchdog Mandates Crypto Reporting In New Law

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Colombia is the newest entrant to a block of countries that seek to bring the crypto industry under their regulatory purview.

According to a recent Bill that has since been approved to law, Bitcoin, Ether, crypto users, and exchanges operating within the country’s jurisdiction will be required to report transactions over a certain amount.

Per resolution 314, the Colombian Anti-Money Laundering (UIAF) will require crypto users to report transactions that exceed $150 or transactions that are made using multiple tokens exceeding $450. The regulation, which takes effect on April 1 seeks to curb some of the ills associated with the crypto industry such as money laundering and the financing of various illicit activities within and without the state since most crypto transactions go unreported.

“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,” reads the resolution.

Following the regulations, the UIAF will now have the power to obtain a record of transactions from crypto users, just like from traditional financial institutions under the “Travel Rule”, making it easier to net suspicious transactions.

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All crypto users who fall under the ambit of this law will be required to report monthly to the UIAF within the first (20) calendar days of every month on any transaction by entities on digital assets. Exchanges will further be required to report any suspicious activities noting to include all participants to the watchdog.

The law further sets out a list of penalties that will be meted on defaulters including fines in the range of $100-$400 for money laundering plus other fines deriving from such-like crimes.

With the continued expansion of the crypto industry, Colombia, which has the second level of biodiversity in the world, recorded $124 million transactions in 2019 with a recent report by Triple-A disclosing that 6.1% of Colombians currently own a cryptocurrency and that 80% of Colombians expressed willingness to invest in cryptocurrencies.

Despite the government’s highhandedness in matters of digital assets, the latest law speaks volumes about its cryptocurrencies regulation trajectory. Recently, the DIAN, Colombia’s tax division has hinted at catching crypto users who have been evading their tax obligations.