Colombian Financial Watchdog Says Local Firms Can Use Capital to Buy Bitcoin

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The corporate superintendence in Colombia has stated in an official memo that companies in the country are legally allowed to buy cryptocurrencies, particularly Bitcoin (BTC), to inject capital, as long as they comply with local regulations.

Colombian Watchdog: Local businesses can buy bitcoin with capital if businesses can show that tokens are “intangible assets”.

According to the publication, the Colombian watchdog pointed out that while the use of crypto assets in the financial sector is “not yet” regulated, there are no legal prohibitions on injecting capital through Bitcoin (BTC) – the only crypto mentioned in the document Asset.

However, they made it clear that the tokens should meet the criteria for “intangible assets”, as defined by the country’s tax observer for cryptocurrencies, Directorate of National Taxes and Customs (DIAN), as follows:

From the inheritance point of view, since these currencies correspond to intangible assets that can be valued, they are part of inheritance and can lead to the generation of a (presumed) income. Accordingly, it can be concluded that virtual currencies are not money for legal reasons. However, in the context of mining activities, to the extent that they are received in exchange for services and / or commissions, they correspond to income and in any case to goods that can be valued and generate income for those who receive them from part of your inheritance and in taxation Matters take effect.

However, the superintendent still warns that Colombian companies dealing with cryptos like Bitcoin should be aware of the “high risks” and “lack of local regulations that surround them”.

Companies are not subject to any special regulations when converting capital into Bitcoin

In addition, the watchdog calls on companies to adhere to the principles of good faith and loyalty to their companies when dealing with cryptocurrencies. You are still legally liable in the event that the value of crypto suddenly loses value.

In fact, the Superintendency of Corporation is reminding local businesses that converting capital into Bitcoin does not grant them any special regulations.

In the document, the Colombian company mentioned the country’s government approving a pilot program on September 22, 2020, which will ask companies to test crypto transactions under a regulatory sandbox approved by the regulator.

What do you think of the current stance of local Colombian authorities towards cryptos? Let us know in the comments below.

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