Edit Analysis - Colombia

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Executive Summary

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Landmark Laws

**Bill 510 of 2024 (Ley Cripto)** (Proyecto de Ley 510/2024)
  - A bill to regulate VASPs, creating a mandatory registry under the Superintendencia de Sociedades and establishing consumer protection and AML standards. Approved in first debate in May 2025 but not yet fully enacted.
  - [Source](https://congresovisible.uniandes.edu.co/proyectos-de-ley/pp/por-la-cual-se-regulan-los-proveedores-de-servicios-de-activos-virtuales-psav-en-el-pais-y-se-dictan-otras-disposiciones/14352/)

**UIAF Resolution 314 of 2021** (Resolución 314 de 2021) - Enacted: 2021-12-15
  - Mandates that all entities facilitating crypto transactions report suspicious operations (ROS) and transactions exceeding $150 USD (individual) or $450 USD (multiple) to the UIAF.
  - [Source](https://www.uiaf.gov.co/normativa/resoluciones/resolucion-314-2021)

**SFC Circular 029 of 2014** (Carta Circular 29 de 2014) - Enacted: 2014-03-26
  - Foundational circular warning supervised financial entities (banks) that they are not authorized to custody, invest in, or intermediate cryptocurrencies.
  - [Source](https://www.superfinanciera.gov.co/inicio/normativa/normativa-general/cartas-circulares-15167)

Considerations

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Detailed Explanation

In Colombia, as of December 2025, cryptocurrency trading is allowed for individuals but remains unregulated, operating in a significant legal gray area. This status stems from the absence of a finalized licensing framework for Virtual Asset Service Providers (VASPs), despite the conclusion of the regulatory sandbox 'La Arenera' in June 2024. The primary regulatory framework is currently defined by a combination of foundational restrictions, active anti-money laundering (AML) rules, and tax obligations, all while the country awaits the full enactment of comprehensive legislation. The Superintendencia Financiera de Colombia (SFC) established a key restriction via Circular 029 of 2014, which prohibits supervised financial entities like banks from directly holding, investing in, or intermediating cryptocurrencies. This creates a major operational hurdle, as VASPs generally cannot access traditional banking services. Concurrently, the Unidad de Información y Análisis Financiero (UIAF) enforces mandatory AML/CFT reporting for all crypto service providers under Resolution 314 of 2021, which requires the reporting of suspicious operations and transactions exceeding $150 USD individually or $450 USD in aggregate. On the fiscal side, the Dirección de Impuestos y Aduanas Nacionales (DIAN) classifies crypto as an intangible asset, subjecting holdings to patrimony tax and profits to capital gains tax, ensuring the state actively monitors and taxes the sector. The future regulatory landscape hinges on the progress of Bill 510 of 2024, the proposed 'Crypto Law,' which was approved in its first congressional debate in May 2025. This bill aims to formally regulate VASPs by creating a mandatory registry under the Superintendencia de Sociedades and establishing clear consumer protection and operational standards. Until this law is fully enacted, the market operates without a formal licensing regime, relying on the existing patchwork of AML and tax rules, with VASPs obligated to comply with UIAF reporting despite the lack of a license.

Bullet Points

# **I. Regulatory Status**
*   **Current Status:** Allowed-Unregulated.
*   Cryptocurrency trading is legal for individuals but operates in a regulatory gray zone.
*   There is no finalized licensing regime for Virtual Asset Service Providers (VASPs) as of December 2025.
*   The comprehensive regulatory framework is pending the full enactment of *Bill 510 of 2024*.

# **II. Key Regulatory Bodies**
*   **Superintendencia Financiera de Colombia (SFC):** Oversees financial institutions; prohibits banks from direct crypto involvement via *Circular 029 of 2014*; oversaw the now-concluded regulatory sandbox ('La Arenera').
*   **Unidad de Información y Análisis Financiero (UIAF):** The financial intelligence unit; enforces mandatory *AML/CFT reporting* for all crypto service providers under *Resolution 314 of 2021*.
*   **Dirección de Impuestos y Aduanas Nacionales (DIAN):** The tax authority; treats cryptocurrency as an *intangible asset* subject to income and patrimony tax.
*   **Superintendencia de Sociedades:** Designated in the proposed *Bill 510 of 2024* as the future primary regulator and registry authority for VASPs.

# **III. Important Legislation**
*   **Bill 510 of 2024 (Ley Cripto):** A bill to regulate VASPs, creating a mandatory registry and establishing consumer protection/AML standards. Approved in first debate in May 2025 but *not yet fully enacted* as of late 2025.
*   **UIAF Resolution 314 of 2021:** Enacted December 15, 2021. Mandates that all entities facilitating crypto transactions report suspicious operations (ROS) and transactions exceeding *$150 USD (individual)* or *$450 USD (multiple)* to the UIAF.
*   **SFC Circular 029 of 2014:** Enacted March 26, 2014. Foundational circular warning that supervised financial entities (banks) are *not authorized* to custody, invest in, or intermediate cryptocurrencies.

# **IV. Compliance Requirements**
*   **AML/CFT Reporting:** All VASPs must comply with *UIAF Resolution 314 of 2021*, reporting suspicious transactions and those exceeding specified value thresholds.
*   **Tax Compliance:** Individuals and entities must declare crypto holdings as part of their patrimony to the *DIAN* and pay capital gains tax on profits.
*   **Future Licensing:** Upon enactment of *Bill 510 of 2024*, VASPs will be required to register with the *Superintendencia de Sociedades* and adhere to new operational standards.

# **V. Notable Restrictions or Limitations**
*   **Banking Restrictions:** Traditional banks are *generally prohibited* from offering direct crypto services, holding crypto assets, or intermediating transactions due to *SFC Circular 029 of 2014*.
*   **Legal Classification:** Cryptocurrency is classified as an *intangible asset*, not as legal tender or currency.
*   **Regulatory Gap:** The temporary regulatory sandbox ('La Arenera') concluded in June 2024, leaving a gap until comprehensive legislation is passed.

# **VI. Recent Developments or Notes**
*   The regulatory sandbox 'La Arenera' has concluded as of June 2024.
*   *Bill 510 of 2024* progressed through its first congressional debate in May 2025, marking a significant step toward formal regulation.
*   The 'Current Time' for this analysis is December 2025.

Full Analysis Report

Complete markdown report for this analysis

Colombia's cryptocurrency landscape is currently defined by a 'Allowed-Unregulated' status, characterized by the legality of individual trading contrasted with institutional restrictions and unfinished legislation. The regulatory environment has been in a transition phase following the conclusion of the Superintendencia Financiera de Colombia (SFC) regulatory sandbox ('La Arenera') in June 2024. This pilot program allowed select partnerships between banks and exchanges (e.g., Bancolombia and Gemini) to operate, but since its termination, no permanent licensing regime has been immediately implemented to replace it. Consequently, while retail users can freely buy and sell assets on international and local platforms, the banking sector remains restricted from directly touching crypto assets under the precedent of Circular 029 of 2014.

The primary legislative effort to resolve this uncertainty is Bill 510 of 2024 (formerly related to Bill 139 of 2021), often referred to as the 'Ley Cripto'. This bill aims to establish a formal registry for Virtual Asset Service Providers (VASPs) under the supervision of the Superintendencia de Sociedades, rather than the SFC. As of late 2025, the bill has advanced through initial debates in Congress (passing the first debate in May 2025) but has not yet been enacted into law. Until this legislation is finalized and the registry is operational, exchanges operate as unregulated commercial entities, though they are tolerated by the government.

Despite the lack of a licensing license, operational compliance is strictly enforced in specific areas. The Unidad de Información y Análisis Financiero (UIAF) requires all crypto service providers to report transactions under Resolution 314 of 2021. This regulation mandates the reporting of individual transactions exceeding $150 USD and multiple transactions exceeding $450 USD, effectively imposing AML/KYC standards on the industry before a formal licensing regime exists. This creates a unique environment where the activity is 'unregulated' in terms of market conduct and prudential standards, but 'regulated' regarding financial intelligence and tax reporting.

Taxation is another area of clarity amidst the regulatory flux. The Dirección de Impuestos y Aduanas Nacionales (DIAN) has explicitly ruled that cryptocurrencies are intangible assets. Colombian residents must include the value of their crypto holdings in their annual wealth tax declarations and report any profits as income or capital gains. The DIAN has intensified its scrutiny of these assets, utilizing data from exchanges and international cooperation to ensure compliance. For retail investors, this means that while trading is permitted, it comes with full fiscal transparency obligations.

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