Colombia cracks down on cryptocurrency transactions

The government of Colombian President Iván Duque Márquez issued new regulations that effectively force exchanges and individuals to report cryptocurrency transactions to The Financial Intelligence Unit (UIAF) – the South American nation’s anti-money laundering watchdog.

Resolution 314, which takes effect on April 1, requires both individuals and exchanges to report cryptocurrency transactions over a $150 -- or cryptocurrency transactions made with multiple tokens valued at over $450 – to the UIAF and is aimed at helping stop money laundering and the financing of terrorist activities.

The law will also require exchanges to report suspicious transactions to the UIAF and establishes penalties for exchanges and users who fail to comply with the established directives, Bitcoin.com reported.

For noncompliant individuals, this could mean penalties of up to 400 minimum monthly wages.

“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,” the resolution reads.

According to the resolution, the bitcoin national market registered transactions for $124 million – a figure which is almost 1.7 times the amount registered in 2018 – a growth which raised concerns about the use of the use of cryptocurrencies for illicit purposes.

The Colombian government has also come to understand that incorporating cryptocurrencies into the tax base is of benefit and the country’s tax regulator recently announced it was taking measures to detect tax evasion regarding the use of cryptocurrencies for trading or transacting.