Colombian cryptocurrency users and exchanges are now required to report all transactions

The UIAF, Colombia’s anti-money laundering authority, has published new legislation requiring cryptocurrency exchanges and users to declare their transactions. An online reporting system is necessary for transactions, and exchanges will be forced to produce monthly notifications on suspicious transactions made by users.

Colombia Tightens Controls on Anti-Money Laundering

Colombian regulators have adopted new rules requiring bitcoin exchanges and users to record transactions beyond a specific threshold. In accordance with Resolution 314 of the Colombian Anti-Money Laundering (UIAF) watchdog, cryptocurrency transactions above $150 or transactions involving multiple tokens exceeding $450 must be disclosed.

To prevent money laundering and terrorist financing, the new rule, which goes into effect on April 1st, aims to give authorities more control over bitcoin assets in the country and prevent them from going unreported. According to the resolution, this issue is addressed:

“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 UIAF will get a complete record of transactions that were deemed anomalous, as well as the people who were responsible for them, from exchanges that send reports of suspicious transactions.

Regulators’ Progress and Penalties

In addition, the law imposes sanctions for exchanges and individuals who do not adhere to these rules. There will be fines of between 100 and 400 minimum monthly salaries for noncompliance if money laundering is shown to be a factor in these operations.

According to Resolution 314, the national bitcoin market transacted $124 million worth of bitcoins in 2019, about 1.7 times the amount that was transacted in 2018. Because of the increased liquidity in these markets as a result of this rise, the authorities expressed concern that these assets might be utilised illegally.

However, the tax climate in Colombia has also been impacted by Colombian institutions’ crypto supervision. Tax authorities in the country, the DIAN, recently said they were taking steps to detect tax avoidance involving the trading or transaction of cryptocurrencies.

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