Colombia Senators Launch Fresh Bid to Regulate Crypto
Senators in Colombia aim to make another attempt to regulate the Latin American nation’s crypto industry. According to the media outlet El Colombiano, Senator Gustavo Moreno and Congress Representative Julián López have introduced a bill seeking to establish a legal framework that “protects” the country’s crypto users.
Colombia: Crypto Regulations ‘Urgently Needed,’ Say Lawmakers
Moreno noted that the lack of regulation means that crypto exchanges and other firms operate in a rules-free environment that “generates uncertainty and risk for customers.”
The Senator added that the “lack of regulation” indicates there are no “protection mechanisms for consumers.” Moreno further stated that Colombia does not have any “control to prevent the misuse of cryptoassets.” Blockchain analysts assert that over five million Colombians now utilize crypto. They estimate that during 2024, citizens and residents of the country transacted approximately $6.7 billion worth of tokens. However, critics argue that adoption has been undermined by a surge in crypto scams and crypto-related pyramid schemes. Others contend that some Colombians are exploiting the largely unregulated crypto industry to launder illicit funds. The nation’s top financial regulator, the Superintendencia Financiera de Colombia (lit: Colombian Financial Superintendence), has been working on crypto-related pilots since 2021. Nevertheless, the same media outlet noted that the Superintendencia’s pilots have yet to yield a “specific regulatory framework.” Such a framework would enable the Colombian crypto sector to “integrate with the national financial system,” the outlet reported.
Regulatory ‘Framework’ Bill
The bill consists of 16 clauses that cover monitoring, rules on marketing, education, crypto tax, and measures for anti-money laundering and counter-terrorist financing (AML/CFT). The lawmakers assert that by “protecting users,” the law could also “encourage [crypto] investment” in the long term.
“Colombia has fallen behind the rest of the world […]. While other countries are moving forward, [the industry here] remains unregulated. Our bill seeks to establish clear rules of the game. We want to generate a reliable and more attractive ecosystem for investment with built-in guarantees for this emerging industry.”
Colombian lawmaker Julián López
VASP Operating Permit System
The bill aims to introduce a licensing system for crypto operators, who would need to register as Virtual Asset Service Providers (VASPs). In other nations, VASP licensing systems are typically designed to compel crypto exchanges and wallet firms to comply with AML/CFT protocols. The media outlet quoted financial analyst Gregorio Gandini, who stated that it is “important to regulate cryptocurrencies” because “they are becoming increasingly popular” in Colombia. He added:
“If crypto is not regulated, [Colombians] will adopt them in an irregular manner.”
However, Colombian crypto investor Daniel Aguilar was quoted as saying that while it is crucial to provide a “safe framework” where firms can “grow and consolidate,” it is important “not to kill innovation with overly strict rules.” Aguilar stated:
“If regulation is too rigid, crypto companies and entrepreneurs could be forced to operate from other countries that have more flexible regulations. We need a legal framework that protects users without stifling the growth of the sector.” The investor also emphasized that it is “important that cryptoassets are taxed reasonably.” Aguilar urged lawmakers to avoid “creating tax burdens that discourage” crypto adoption in Colombia.