Bitcoin exchange Colbitex had a short lived success, if you would like to call being open for a few days successful.
Colbitex was Colombia’s first locally owned bitcoin exchange where people could buy and sell bitcoin in Colombian Pesos (COP). It was open for a month prior to going live in beta testing, and after going live a few days later they have shut down.
In June we reported that Colbitex launched in test mode with plans to go live in July, which they did eventually go live on July 25. However, a few short days later we have discovered that the exchange has closed down, with a non-descriptive message written on their website saying “Estamos en mantenimiento. Para cualquier duda contáctanos a email@example.com,” which just means they are in maintence mode and should contact support.
Upon further digging, we found a longer more meaningful message on their Facebook page, however it’s still cryptic on exactly what is happening. Colbitex wrote,
Dear users, we are reviewing some processes and issues regulations in order to continue operating within the law.
In the coming days we will generate a statement extending this information.
Please request the withdrawal of funds by mail to firstname.lastname@example.org or through a support ticket https://colbitex.freshdesk.com/ Withdrawals will be processed immediately.
Thanks for your attention.
As the message implies, Colbitex had to stop operations due to some sort of regulation conundrum. It’s not clear exactly what is happening, but it was enough for the exchange to close it’s doors.
Bitcoin regulation in Colombia
The Superintendencia Financiera de Colombia (SFC), the government body responsible for overseeing financial systems in the South American nation, issued guidance two years ago on bitcoin and other digital currencies and how they should be handled in the country.
The SFC issued a warning to consumers, and blocked financial institutions from holding, investing in or brokering bitcoin transactions, according to a report in 2014.
It appears not much has changed in terms of bitcoin acceptance from authorities in Colombia. In the popular Colombian news website Semana.com, which has 3.1 million followers on Twitter, they re-affirmed that in the country the SFC “prohibits financial institutions receive payments in virtual currencies.”
Another publication Las2Orillas, wrote in regards to regulation of bitcoin in Colombia, that it “does not clearly define [the] legal nature, and scope that can have Bitcoin within Colombian territory.”
In Latin America, bitcoin acceptance is still maturing, and is not widely accepted yet. In particular, by governments which are more traditional and conservative, and in some cases prone to corruption.
According to Transparency International’s 2013 Corruption Index about Colombian President Juan Manuel Santso, they said,
“The new institutional reforms promoted by the government of President Santos—the new Anti-corruption Act of 2011, and the creation of a new Anti-corruption office in the Presidency—have not contributed to curbing corruption. To the contrary, in Transparency International´s 2012 Corruption Perception Index, the country received the worse score in ten years, going from 57 in 2002 to 94 in 2012.”
In nearby Chile, bitcoin hasn’t been accepted well by the banking cartels, specifically Santander Bank. In Latin America, banks are commonly closely tied to governments. Recently, we ran a story of how the Chilean bitcoin exchange SurBTC lost 70% of their customers due to a Santander Bank blockade.
It’s not completely understood yet on the exact reasons why Colbitex has shut down. We have reached out to them for comment, and if we hear back we will post an update with the details.