Centralized exchange in Colombia

Exchanges (Virtual Asset Service Providers - VASPs):

General Operation: VASPs operating without direct interaction with the traditional financial system (e.g., direct fiat on/off-ramps via banks) are primarily subject to AML/CFT obligations but are not licensed by the SFC. They operate in a somewhat "grey area" from a licensing perspective, though the UIAF views them as obliged entities for AML purposes.

Interaction with Financial System: If an exchange seeks to offer fiat currency on/off-ramps through Colombian banks, it generally needs to participate in the SFC's Regulatory Sandbox ("La Arenera") in partnership with a regulated financial institution. This sandbox allows for supervised pilot programs.

Regulatory Sandbox (La Arenera): The closest mechanism for innovation is the SFC's La Arenera, a regulatory sandbox established under Circular Externa 021 de 2023. This allows financial entities (and in certain cases, non-supervised entities in partnership with supervised ones) to test innovative financial services, including those involving crypto assets, under a controlled environment with temporary waivers or specific authorizations. However, participating in La Arenera does not exempt a token from being classified as a security; rather, it allows for a structured dialogue and potential adaptation of regulations if a security token is being tested.

Ongoing Development: Ley 2143 of 2021 mandated the SFC to propose a comprehensive regulatory framework for crypto assets, indicating a future move towards a more formal licensing system.

Registration Regime (AML/CFT): Colombia primarily operates a registration regime for AML/CFT purposes. All VASPs, regardless of whether they are licensed or participating in the sandbox, are considered "obliged entities" by the Unidad de Información y Análisis Financiero (UIAF) and must:

No specific "crypto custody license" currently exists in Colombia.

The "La Arenera" Regulatory Sandbox: This is the closest Colombia has to a structured approach for crypto firms.

No specific regulations for segregation of client crypto assets.

Separation: Client assets must be clearly segregated from the firm's own assets to protect clients in case of firm insolvency.

Cryptocurrencies are not legal tender in Colombia.

They are not regulated by the SFC as financial products or securities, unless they exhibit characteristics that make them fall under existing definitions (e.g., a security token).

Resolución 314 de 2021 de la UIAF: Por la cual se imparten instrucciones relacionadas con el SARLAFT a los proveedores de servicios de activos virtuales.

Identification and Verification of Customers:

Identification and verification of beneficial owners (typically individuals holding 25% or more of the company's shares or voting rights, or exercising control through other means).

Ongoing Monitoring: Continuous scrutiny of transactions undertaken throughout the course of the relationship to ensure that they are consistent with the VASP's knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds.

Risk-Based Approach: VASPs must implement a risk-based approach to CDD. This means applying enhanced due diligence (EDD) for higher-risk customers (e.g., Politically Exposed Persons - PEPs, customers from high-risk jurisdictions, complex corporate structures, high-value transactions, or unusual transaction patterns) and simplified due diligence (SDD) for lower-risk customers.

Report suspicious transactions (SARs) to the UIAF.

UN Sanctions: As a member state of the United Nations, Colombia is legally obligated to implement sanctions imposed by the UN Security Council. UIAF Resolution 314/2021 directly references adherence to UN Security Council resolutions as a core component of ML/TF risk management. This includes asset freezes and other restrictions against listed individuals and entities.

Entity Targeted: OmegaPro Group (an international alleged Ponzi scheme), its local promoters, influencers, and related entities operating in Colombia (e.g., Bux Corp, Smart Business Corp). Violation Type: Unregistered and unauthorized financial intermediation, operating a multi-level marketing scheme that promised high returns without proper backing, misleading advertising, consumer fraud, and alleged pyramid scheme. Outcome: SIC ordered the cessation of all promotion and operations of OmegaPro-related schemes in Colombia, imposed significant fines, and mandated restitution to affected consumers. The Fiscalía has pursued criminal charges, leading to arrests of key promoters and the freezing of assets. Many victims have lost significant sums, and the full extent of recovery is uncertain.

Entity Targeted: Daily Cop S.A.S. and its founders/promoters (e.g., Camilo Andrés Suárez Aldana, David Mateo Suárez Aldana). Violation Type: Alleged pyramid scheme, unauthorized and illegal financial intermediation using cryptocurrencies as a front, offering unrealistic returns, consumer fraud. Outcome: SIC issued a definitive resolution ordering the immediate cessation of Daily Cop's activities, imposing fines, and requiring restitution. The Fiscalía subsequently arrested key figures behind the scheme and initiated criminal proceedings, uncovering millions of dollars in alleged fraud.

Entity Targeted: Local promoters and affiliates of the international Generación Zoe scheme operating in Colombia. Violation Type: Alleged illegal financial intermediation, fraud, and operating a Ponzi/pyramid scheme under the guise of coaching and crypto investments. Penalty Amount: Arrests and criminal charges against Colombian operators. Assets linked to the scheme were seized. Outcome: Colombian authorities, working with international counterparts, arrested individuals linked to Generación Zoe's operations in the country. Criminal proceedings are ongoing for charges related to aggravated fraud and illegal financial intermediation. Outcome: Provided valuable insights for future regulation, demonstrating a willingness by the SFC to study and understand crypto operations under controlled conditions.

AML/CFT Obligations: All VASPs are subject to Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) requirements, regardless of whether they are licensed or not.