Cryptocurrency Legal Status in Colombia: What You Need to Know in 2025

Colombia doesn’t ban cryptocurrency. But it also doesn’t protect you if something goes wrong. That’s the reality for over 1.2 million Colombians using crypto in 2025. You can buy Bitcoin on Binance, send Ethereum to a friend, or trade stablecoins to dodge inflation - but if a local exchange vanishes with your money, there’s no government agency to call. No law says they did anything illegal. No regulator will step in. And no court will force them to pay you back.

Colombia’s Crypto Gray Zone

Cryptocurrencies aren’t illegal in Colombia. They’re not legal tender, either. The Central Bank of Colombia made that clear back in 2018, and it hasn’t changed. Crypto is treated like digital property - something you own, not something you can use to pay your rent or buy a car unless the seller agrees. Merchants aren’t required to accept it. Banks won’t process crypto deposits. And if you try to pay taxes in Bitcoin, the tax office will tell you to convert it to pesos first.

This isn’t a loophole. It’s a vacuum. There’s no specific law defining what crypto is. No licensing system for exchanges. No rules for who can run a crypto platform. The Financial Superintendency of Colombia (SFC) says crypto isn’t a security, so it doesn’t fall under their oversight. The Central Bank says it’s not foreign currency, so it doesn’t fit into the country’s exchange controls. That leaves crypto floating in legal limbo.

Who’s Allowed to Operate?

Despite the lack of rules, nine major crypto exchanges operate in Colombia. Binance alone handles 68% of all trading volume, according to Kaiko Research. Others include Kraken, Bitso, CryptoMarket, and Paxful. These platforms aren’t licensed by the government - they just exist. Most require KYC (know your customer) checks, asking for your ID and proof of address. That’s not because the law demands it. It’s because they want to avoid trouble with international partners and prevent money laundering.

The absence of regulation means no one checks if these platforms are solvent. No one audits their reserves. No one ensures they’re keeping your funds safe. That’s why the Me Coin scam still haunts Colombia’s crypto scene. In 2018, a local platform promised 50% monthly returns. Over 20,000 people invested. Then the founders disappeared with $60 million. No one was prosecuted. No assets were recovered. The case was closed because there was no law against it.

How People Use Crypto in Colombia

Most Colombians aren’t trading for profit. They’re using crypto to survive. Chainalysis reports that 63% of crypto use in Colombia is for remittances. People send money to family in other countries because traditional wire services are slow and expensive. Crypto lets them send funds in minutes for less than 2% in fees. Stablecoins like USDT are especially popular - they keep their value while moving across borders.

Another 29% use crypto to hedge against inflation. The Colombian peso lost 12% of its value against the dollar in 2024. People who can’t access dollars or foreign bank accounts turn to Bitcoin or USDC as a store of value. A 2025 survey by CryptoNoticias found that 71% of crypto users in Colombia have used it to preserve savings during economic uncertainty.

Gambling and entertainment make up just 8% of usage. That’s low compared to other Latin American countries. Colombia doesn’t have a legal online gambling market, so crypto platforms fill the gap - but without regulation, there’s no oversight. No responsible gaming limits. No dispute resolution.

Taxes: The Silent Risk

The tax authority, DIAN, hasn’t issued clear rules on crypto. But they’re watching. In 2024, they estimated $120 million in unreported crypto gains. That’s not because people are hiding it on purpose - it’s because no one knows how to report it.

Here’s what’s understood: if you sell crypto for a profit, it’s taxable income. If you trade one coin for another, it’s a taxable event. If you earn crypto from staking or mining, it’s treated as ordinary income. Gains are taxed at progressive rates up to 39%, depending on your total income. But there’s no official form. No guidance on how to calculate cost basis. No software approved by DIAN.

Most users rely on third-party tools like Koinly or CoinTracker. But if DIAN audits you and your records don’t match their expectations, you’re on your own. No tax lawyer specializes in crypto in Colombia because the law doesn’t exist.

What’s Different About Colombia vs. Neighbors?

Brazil passed a Bitcoin law in 2022 and is rolling out phased regulation. Mexico’s crypto use is falling as people shift to stablecoins for remittances. Argentina has strict capital controls that make crypto harder to use. Venezuela created its own state-run crypto, the Petro, which most people don’t trust.

Colombia sits in the middle. No regulation means no barriers to entry. That’s why adoption keeps growing - 37% year-over-year since 2022. But it also means no safety net. You’re trading in a market with no referees.

Real User Experiences

On Reddit’s r/CryptoColombia, users share stories daily. One user, JuanBTC92, says: “I’ve used Binance for three years. Deposits via Nequi are instant. Withdrawals always work.” That’s the good side.

Another, AnaCrypto2023, posted on Trustpilot: “Lost 2.5 BTC to a LocalBitcoins seller who vanished after I paid. No recourse. No police report helped.” That’s the bad side.

Local-only exchanges have a 3.1/5 Trustpilot rating. Global platforms like Binance and Bybit score 4.2/5. Why? Because they follow international standards - even if Colombia doesn’t require them.

What’s Next for Colombia?

Congress is considering Bill 325 of 2024, which would create a legal framework for digital assets. But fintech groups are pushing back. They argue regulation will kill the organic growth that’s made Colombia a crypto hotspot in Latin America.

Most experts think Colombia won’t ban crypto. It won’t make it legal tender. Instead, they predict a narrow regulatory approach - like Thailand or the Philippines. Exchanges will be forced to follow anti-money laundering rules. Users will still be on their own for fraud protection. Taxes will remain murky.

The Central Bank says it’s “monitoring global developments.” That’s code for “we’re waiting to see what Brazil does.”

What Should You Do?

If you’re using crypto in Colombia:

• Use global exchanges like Binance or Kraken - they’re more stable and secure than local platforms.
• Keep your own private keys. Never leave large amounts on an exchange.
• Track every transaction. Use a crypto tax tool and save screenshots of trades.
• Never invest in “guaranteed returns.” If it sounds too good to be true, it is.
• Don’t assume you’ll get help if something goes wrong. The system isn’t built to protect you.

The truth is simple: Colombia lets crypto thrive because it doesn’t control it. That freedom comes with risk. And right now, the only person responsible for your safety is you.