Financial Crime World

Here’s the article in markdown format:

Regulation of Crypto Assets in Colombia: A Proposed Draft Bill

===========================================================

Key Definitions

In order to understand the proposed draft bill, it is essential to define key terms related to crypto assets.

  • Crypto Asset Exchange Platform (PIC): A computer application or interface that provides crypto-asset exchange services.
  • Crypto-asset Exchange Service Provider: A company responsible for operating and managing PICs, registered with the Chamber of Commerce.

Requirements for Crypto-Asset Exchange Service Providers

To operate in Colombia, crypto-asset exchange service providers must adhere to specific requirements:

Incorporation and Corporate Purpose

  • Must be incorporated as a commercial company in Colombia or have a branch of a foreign company.
  • Must include crypto-asset exchange services as their exclusive corporate purpose.

Security Measures and Compliance

  • Must establish and maintain a computer security program to protect systems and information from unauthorized access.
  • Must adopt measures to detect and prevent money laundering and terrorist financing.
  • Must register with the Special Register for Crypto-assets Service Providers before the Chamber of Commerce.

Prohibited Activities

To ensure the integrity of the market, certain activities are strictly prohibited:

  • Offering or paying consumers interests or returns on their balances over time.
  • Transferring, lending, or encumbering crypto-assets without consumer authorization.
  • Developing commercial networks or multi-level marketing activities related to crypto-assets.
  • Refraining from conducting transparent and reasonable financial transactions.

Regulatory Challenges

While the proposed bill addresses some aspects of crypto asset regulation, there are still several challenges that need to be addressed:

Lack of Comprehensive Regulation

  • The proposed bill does not comprehensively regulate the different legal aspects of crypto assets.
  • This lack of clarity may hinder investment and growth in the sector.

Need for Coordination between Public Entities

  • There is a need for coordination between public entities regulating crypto-assets to achieve legal certainty and stimulate investment.