Name
Global FinTech Guide
Country _ Name
Colombia
SectionTitle
ICO/token sale
Body
Companies and projects have increasingly relied on the sale of digital assets, or tokens, as a means of fundraising. These tokens generally do not grant the holders an ownership interest in the issuing company or project, but may provide governance rights, access rights or other utility. This has been conducted through public sales known as initial coin offerings (ICOs), proliferation through token generation events (TGEs) or private sales, among other mechanisms.  While showing characteristics of traditional methods of fundraising, there are a range of unanswered questions related to the legal classifications of such products. As ICOs and TGEs will usually be distributed online and internationally, there is usually no single legal framework applying to such transaction, and the legal framework of each market in which the tokens may be offered or sold needs to be considered.

Introduction

Attitude of the country towards ICOs/token sales

In Colombia, there is currently no specific legal framework expressly regulating ICOs or token sales. The general attitude of the authorities has been cautious, with the Superintendency of Finance (Superfinanciera) repeatedly clarifying that cryptoassets and tokens issued through ICOs are not recognized as legal tender, securities or financial instruments under Colombian law. Consequently, these fundraising mechanisms operate in a regulatory grey area and issuers must carefully assess the potential qualification of the tokens offered under existing rules on securities, collective investment schemes, or crowdfunding, depending on their structure and purpose.

Supervisory authorities have issued multiple public statements warning about the risks for investors and highlighting that the promotion of ICOs or token sales to the general public may be subject to consumer protection, AML/CTF and advertising rules, even if the tokens do not qualify as securities. In practice, while there have been local initiatives to launch ICOs, the lack of clear regulation and the caution of financial regulators have limited large-scale public token sales in the country.


Legal affairs

Presence of any explicit regulation on ICOs and the issuance of token/coins

There is no regulation on ICOs and the issuance of crypto currencies in Colombia. There are no explicit restrictions on ICOs or the issuance, distributions, and transfer of crypto currencies in Colombia. Yet, crypto currencies are not recognized by the Colombian State nor are they part of a centralized, controlled or monitored system. In addition, the Colombian Central Bank, as monetary, credit and exchange authority in Colombia, stated the following:

  • The only monetary unit in Colombia is the Colombian peso (fiat currency) issued by the Colombian Central Bank.
  • Bitcoin or similar crypto currencies are not legally recognized in Colombia. Therefore, they do not constitute a means of payment of legal tender with unlimited liberating power. There is then no obligation to receive it as a means of compliance with obligations.

Presence of any explicit restrictions on ICOs or the issuance, distribution and/or transfer of token/coins
There is no specific license in Colombia that will allow an entity to issue an ICO. In any case, please note that an ICO may be considered as a criminal activity. As per Colombian Criminal Code, if a person or entity collects money from the public in a massive and habitual way without the prior authorization of the competent authority, the following criminal sanctions may be imposed: (i) from 120 months to 240 months of imprisonment, and  (ii) fines of up to 50,000 Colombian legal monthly minimum wages.


Obligations and requirements to issue token/coins

As already mentioned, in Colombia there is still no regulation on this matter. Therefore, the authorities do not require a license to carry out this activity.

Classification of token/coins in the jurisdiction

For the time being, the jurisdiction in Colombia does not recognize this type of product as legal tender.

Presence of a duty to publish a prospectus bevor offering token/coins to investors

No.

Presence of AML/KYC requirements that are needed to be fulfilled regarding (i) the initial issuance of token/coins and (ii) any following transfer of token/coins to third parties

No requirements are enforceable for now in Colombia.

Additional comments regarding (i) the legal situation for ICOs/token/coins and (ii) any following transfer of token/coins to third parties

N/A


Economic conditions

Market size for ICOs/token sales and existence of any previous regulated ICO/token sales in the jurisdiction

There is no data on this market in Colombia.

Additional comments regarding the economic situation for ICOs/token sales or what companies must be aware of in this business area

N/A




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