Colombia Takes First Steps Towards Cryptocurrency Exchange Regulation

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In its first meeting, Colombia’s Congress approved a bill that regulates the behavior of cryptocurrency exchanges in the country, taking the first steps toward bringing clarity to this issue. Mauricio Toro, a Green Party representative and one of the bill’s creators, stated that the bill is needed to protect users from Ponzi schemes and provide them with security in the crypto world.

More and more countries in Latin America are recognizing the growth and influence of cryptocurrency and cryptocurrency-related businesses in their countries. Colombia is one of them, prompting the government to speed up the regulation of cryptocurrency exchanges in order to clarify the companies’ responsibilities and obligations.

In this regard, the Colombian Congress has taken a step in the right direction by passing a bill that aims to improve the clarity and security of cryptocurrency exchange operations in the country. Representative Mauricio Toro of the Green Party, one of the bill’s proponents, expressed his thoughts on the development of social media. According to Toro:

Colombia has to move forward in regulating this business, which is legal and multi-million dollar, so that jobs and opportunities are created, but also so that it provides peace of mind to Colombians who can buy their assets safely.

Furthermore, Toro stated that this bill is also directed to safeguard users and customers of these platforms from falling into Ponzi schemes.

While Toro was very optimistic about the impact this bill might have, the project is still in its early stages and will need to be discussed three more times to be approved and presented as law. This might take more time than usual, due to the political circumstances that Colombia is facing today, in the middle of its election cycle, with its second election round coming soon.

If approved in its present state, cryptocurrency exchanges in Colombia will have to register to offer their services, disclosing the benefits, risks, and possible profits of crypto trading to their users. Also, banks will allow the connection between cryptocurrency exchanges and accounts in fiat currency directly, helping to avoid the development of Ponzi schemes and other pyramid scams.

Other institutions in Colombia are also moving to regulate and control customer-exchange interactions. In April, the money-laundering watchdog, the UIAF, announced that users would have to report their cryptocurrency movements to the organization via an online system. However, the organization backpedaled later and postponed the sanction of the mentioned resolution.