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Latin American Countries have seen massive crypto adoption and that also calls for proper regulations.
Looking at the increasing popularity and growing acceptance of cryptocurrencies all over brings the possibility of regulations. These regulations, however, are not only limited to crypto assets but also include the related firms. Virtual Assets Service Providers or VASPs are among such crypto firms. And now the Colombian Financial watchdog came up with regulation norms for crypto service providers.
The Financial Superintendence of Colombia brought these regulatory norms through documents. These norms would ensure that crypto exchanges and such providers of custody meet to receive services from the banks as their customers. It clearly mentioned that VASPs and virtual assets fall under the purview of these presented regulations.
While following the similar measure for further regulations, it also outlined that there will be a connection setting up between the virtual asset service providers and financial information and analysis unit of Colombia—UIAF. This would ensure successful implementation of plan of action that would help dealing with the illicit activities from money laundering to terror funding attempts taking place on the platform.
Further it also referred to set up consent with the Financial Action Task Force promoted crypto travel rule. The norms outlined that banks need to ensure that VASPs who reach them must possess the virtual assets transactions monitoring capacity, both technological and operational. Additionally, they also have to be capable to obtain, keep and transmit the originator’s information and receiver of each transaction.
According to the proposed document, it clarifies that the crypto assets service providers would need to clearly present information to their customers. From the information about their offerings of services to the associated risks involved in the services to available virtual assets on platforms to service costs.
These VASPs will also need to have a plan to counter the risks related to operations and cybersecurity. In this way, they could handle the potential problems of hacks on the platform that could result in affecting the services that they deliver to their customers. While banks will also be compelled to differentiate their own roles and responsibilities from crypto service providers. They can do this by informing customers that only VASPs are responsible for any problems related to service providers.
Currently this proposal from Financial Superintendence is under discussions and also receiving suggestions. However, there is not clear information about when this could applied but the suggestions are opened to add by 12th August, 2022.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
