Key facts:
  • The evaluations will take place in a sandbox and will last for 1 year.

  • Only pseudonymous cryptocurrencies, such as bitcoin or ether, will be accepted.

The Financial Superintendence of Colombia (SFC) announced this Thursday how the tests will be for transactions related to cryptocurrencies between the exchanges bitcoin and local banks. One of the most striking aspects is that the evaluations will be governed by the standards of the Financial Action Task Force (FATF).

The pilot plan will be convened in the next quarter and will be developed in a sandbox (regulated test bench) in five stages: application, selection, structuring, monitoring and feedback, as reported by the regulatory entity through a release.

«The National Government will launch this quarter the call for entities supervised by the SFC, in alliance with crypto-asset exchange platforms or«exchange»Incorporated in the country, apply to temporarily test in the controlled space of the Arenera, the management of operations of cash-in (resource deposit) and cash-out (withdrawal of resources) under a set of defined conditions to carry out the pilot test ”, explained the SFC.

Complying with FATF regulations means that the highest standards will be applied to minimize the risk of money laundering and terrorist financing. That is, it is about the same measures applied by financial institutions with information records and report of suspicious operations. The intention is to offer the best guarantees to users.

The FATF is so focused on auditing Bitcoin that this week it released a report listing a number of actions that would be “suspicious” when conducting transactions with the first cryptocurrency on the market. Many of the mentioned actions are performed regularly by cryptocurrency users.

Others details What stands out from the tests is that they will last for 1 year and only transactions with pseudonymous cryptocurrencies, such as bitcoin or ether, will be processed. It follows from the above that transactions with privacy-oriented currencies such as Monero or Zcash will not be part of the tests, and may not be allowed for trading in the country.

Requirements for exchanges de bitcoin

Among the requirements is that exchanges They will only offer the buying and selling service, a wallet for the storage of cryptocurrencies and only natural persons may participate.

A tool will also be implemented for the “Know your customer” (KYC) and “Know your transaction” (KYT) processes, as well as the authorization of an entity supervised by the SFC for operations with exchange houses. It remains to be defined what will be the limits on the amounts for deposits and withdrawals.

For the monitoring of transactions and identity certifications, the SFC mentions the services provided by the companies Chainalysys, Elliptic, CipherTrace, IdentityMind and Crystal.

During the development of the tests, reports must be presented on how the process is progressing, while the SFC must send monthly reports to the Evaluation and Monitoring Committee (CES). The superintendency must also report the progress to a figure known as the “Mesa de Criptoactivos” of which no details were offered.

According to the tentative dates, in November of this year the application cycle should be closed and in December the announcement of the entities that will participate will be made. The start of the pilot tests is scheduled for the first quarter of 2021.

About him sandbox regulatory advancement by Colombia, CriptoNoticias reported in February that its formation was generating uncertainty among exchanges cryptocurrencies. The reason is that exchange houses were not included in the tests with crypto assets.

Despite this panorama, the country announced this week that banks and exchanges will participate together in the pilot tests, something that recognizes the progress that cryptocurrency operations are reaching in the country.

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