By Katt Gu
May 29, 2014. Banco Central de la República Argentina (The Central Bank of Argentina) issued a statement warning the public about the risks involved in the use of virtual currency. The statement confirmed that virtual currency is not legal tender, as it is not backed by the central bank or any other international monetary authority.
July 10, 2014. An announcement was made by Unidad de Información Financiera (Financial Information Unit), Argentina’s main anti-money laundering police effort, ordering all financial services companies in the country to file a monthly report on transactions involving digital currency such as Bitcoin. The purpose, according to the agency, was to detect and deter money laundering and terrorist financing, and other threats to the integrity of the country’s financial system. After that, two Argentine banks, Banco Santander Río and Banco Gailicia, abruptly closed the bank accounts belonging to the cryptocurrency exchange Unisend, citing Article 792 of the Argentinean Commercial Code. The closure, according to Unisend partner José Rodriguez, could be associated with the new UIF resolution.
December 11, 2017. The Comisión Nacional de Valores of Argentine (The National Securities Market Commission) issued a communique on ICO to warn investors regarding the potential risks associated the instrument. The CNV noted that ICOs, to date, are not subject to any specific regulation of CNV. Nevertheless, it also stated under the provisions of Chapter VI, Title V, Book III of the Civil and Commercial Code of the Nation and Article 2 of the Capital Market Law No. 26.831, certain ICOs may be subject to the control of the CNV, depending on the structure and characteristics of each project. In such cases, if not requested and prior authorization is not obtained from the CNV, said ICOs would be considered as an unauthorized public offering, which could generate both administrative and criminal liabilities for the subjects involved.
May 6, 2014. The Banco Central de Bolivia (Central Bank of Bolivia) banned the use any currency not issued or regulated by the state, including Bitcoin and a list of other cryptocurrencies. The resolution states that citizens are prohibited from denominating prices in any currency that is not previously approved by its national institutions.
May 30, 2017. The Supervisión del Sistema Financiero (ASFI) of Bolivia arrested 60 people who were meeting at the Cine Center of Santa Cruz de la Sierra for a workshop related to the investment of money in virtual currencies. The head of ASFI, Lenny Valdivia Bautista, when commenting on this arrest, said that it is important to remind the population that by Resolution of the Board of the Central Bank of Bolivia (BCB), No. 044/2014 of May 6, 2014, the use and circulation of any kind of virtual currencies is strictly prohibited throughout the national territory. In addition, he urged Bolivians not to be fooled and not to participate in the cryptocurrency advocate groups on WhatsApp or so, as the only thing these people are doing is taking advantage of the population, and deceiving people to appropriate their money.
April 7, 2014. The Brazilian tax authority, Receita Federal, required that people who buy and sell cryptocurrencies to pay an income tax on earnings (15% of its capital gains), unless the total amount involved is less than R$35,000. In the newest manual issued by RF for declaration of personal income tax, Imposto Sobre a Renda da Pessoa Física, the agency answered directly to the taxability of virtual currency on topic 447, “Should virtual currency be declared?” and topic 607, “Is the income obtained with the allocation of ‘virtual’ currency taxable?”.
November 10, 2017. The Brazilian Comissão de Valores Mobiliários issued a statement saying that depending on the economic context of the fundraiser and the rights conferred to investors, the issuance of tokens may fall under the definition of securities pursuant to article 2 of Law No. 6,385/76, the Securities Act. In such cases, the tokens offered through ICOs cannot be legally traded on virtual currency trading platforms, as the latter are not authorized by the CVM to trade securities in Brazil. In addition, the CVM pointed out that no ICO has been registered or exempted from registration in Brazil as of the statement.
November 16, 2017. Banco Central do Brasil reinforced that transactions involving cryptocurrency, such as ICOs, are not issued nor guaranteed by any monetary authority, so there is no guarantee that it can be converted to sovereign currency, nor its value backed up in real assets of any nature. Therefore, the risks arising from transactions with the use of cryptocurrency are entirely of the parties involved. The central bank also noted that transactions with cryptocurrencies and related instruments involving cross-border transfers based on foreign currency are subject to the applicable regulation, in particular that the transactions must be executed by entities authorized by BACEN to operate in the foreign exchange market.
January 12, 2018. The CVM ruled that cryptocurrencies cannot be considered financial assets, which in effect bars local funds from investing directly in assets such as bitcoin. The rule further stated that funds who intends to invest indirectly in cryptocurrencies by taking a stake in foreign funds should await further clarification from CVM.
May 26, 2014. In consideration of the rise of “virtual currencies” and the recent problems faced by the platforms in which these currencies are traded, such as Mt.Gox, a Circular was issued by the Superintendencia Financiera de Colombia (Financial Superintendence of Colombia), which informs the public about risks to which they are exposed when buying and trading virtual currencies. The Financial Superintendence clarified that virtual currency such as Bitcoin is not legal tender in Colombia, and it is not an asset that can be considered a currency in accordance with the criteria of the International Monetary Fund. Moreover, the Financial superintendence noted that neither cryptocurrency trading platforms or marketers of virtual currencies are currently regulated by Colombian law or under the control, supervision or inspection of the Superintendence, therefore, users and investors of virtual currency must assume the risk inherent to the activities as the companies may not have insurance or lack efficient risk mitigation procedure.
November 16, 2016. The Financial Superintendence reiterated the considerations indicated in Circular Letter 29 of 2014, particular calls on financial institutions under its supervision not to operate with virtual currency.
February 25, 2017. The Superintendencia de Sociedades (The Superintendency of Corporations), a technical agency under the Ministry of Commerce, Industry and Tourism in Bogotá, Colombia, issued a statement warning the public to be wary of marketers of virtual currencies who offer exceptionally high return within a short period of time and even encourage investors to bring more people. The statement reaffirmed the stance of Financial Superintendent in the previous two Circular Letters, and stressed that there are no multi-level companies authorized to trade this type of assets in Colombia.
July 23, 2014. The National Assembly of Ecuador, with an absolute majority, approved the amendment to the Organic Monetary and Financial Organic Code. The bill introduced the creation of a new, state-run digital currency, whose value is backed by the assets of the Banco Central del Ecuador, the nation’s central bank. Meanwhile, the bill has prohibited the use of circulation of digital currency not authorized by the Political and Monetary and Financial Regulation Board, the violation of which will result in a penalty pursuant to the provisions of the Comprehensive Organic Criminal Code and confiscation of said currency and articles brought with the currency. The legislation, in effect, has banned the use of cryptocurrency in the country.
January 8, 2018. The Banco Central del Ecuador (Central Bank of Ecuador) issued a terse statement informing the public that the purchase and sale of cryptocurrencies – such as bitcoin – through the Internet is prohibited in the country. The statement pointed out that the financial transactions carried out through virtual currencies are not controlled, supervised or regulated by any entity in Ecuador, so its use may represent a financial risk for those who use it. In the ending note, the BCE reiterated that bitcoin is not a legal tender and is not authorized as a means of payment of goods and services in Ecuador, as established in article 94 of the Monetary and Financial Organic Code.
December 3, 2018. The President of the Republic, Nicolás Maduro, announced the implementation of a cryptocurrency system called “Petro”, which is backed by the natural riches of the nation such as gold, oil and gas, amid an economic crisis and a plunge in the value of the bolivar. Maduro indicated that Petro will help Venezuela to overcome the financial blockade from U.S. sanctions, and thus towards a new form of international financing for its development and strengthen the sovereignty and economic independence of the country. Per the statement, the government was also planning to create a “blockchain observatory” as an institutional, political and legal basis for the launch of the Venezuelan cryptocurrency. The entity will be formed by a multidisciplinary team composed of approximately 50 experts and specialists in the areas of economy, legal and finance and will be affiliated with the Ministerio del Poder Popularpara Educación Universitaria, Ciencia y Tecnología (Ministry of People’s Power for Higher Education, Science and Technology).
January 5, 2018. President Nicolás Maduro ordered the issuance of first 100 million tokens of the Petro. According to Manduro, each petro will be pegged to the price of one barrel of Venezuelan crude oil, which put the total value of the issuance at just over $5.9 billion. During the meeting of the council of ministers on January 30, 2016, Manduro declared that the pre-sale of Petro will start on February 20. The official Petro whitepaper was released and signed by the president on the same day.
February 20, 2018. President Nicolás Maduro claimed that Petro raised $735 million in the first day of its presale, though he did not give any detail about the initial investors or evidence for the figure. Petro allegedly attracted over 200,000 orders within the 30-day period from 133 countries, including the U.S., China, Russia, Turkey, etc.
 Currently, Venezuela does not have any ICO related regulation. However, it is the first country who issued its government-backed cryptocurrency through an ICO.
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