In official communication 100-237890 of December 14, 2020, the Superintendency of Companies changed its doctrinal position regarding the possibility of contributing crypto assets to a company and marketing them according to its corporate purpose. The Superintendency based its decision on a pronouncement from the International Accounting Standards Board, in which it considered that cryptocurrencies are contained in the current norms that govern international accounting standards.
The ISBD (for its acronym in English), affirmed that cryptocurrencies can be categorized as intangible assets, “identifiable assets, of a non-monetary nature and without physical appearance”, in accordance with rule IAS 38. They affirmed the above when verifying that the Cryptocurrencies can be separated from the holder and sold or transferred individually and do not grant the holder a right to receive a fixed or determinable number of monetary units.
As they have been classified as “intangible assets”, they can be considered as inventories “when they are held for sale in the ordinary course of business” (IAS 2). When IAS 2 rule is not applicable, because the company has crypto assets as assets on its balance sheet, but these are not part of the company's inventories, the provisions of IAS 38 rule will apply.
In official communication 100-237890 of December 14, 2020 , the Superintendency of Companies changed its doctrinal position regarding the possibility of contributing crypto assets to a company and marketing them according to its corporate purpose. The Superintendency based its decision on a pronouncement from the International Accounting Standards Board , in which it considered that cryptocurrencies are contained in the current norms that govern international accounting standards.
The ISBD (for its acronym in English), affirmed that cryptocurrencies can be categorized as intangible assets, “identifiable assets, of a non-monetary nature and without physical appearance”, in accordance with rule IAS 38. They affirmed the above when verifying that the Cryptocurrencies can be separated from the holder and sold or transferred individually and do not grant the holder a right to receive a fixed or determinable number of monetary units.
As they have been classified as “intangible assets”, they can be considered as inventories “when they are held for sale in the ordinary course of business” (IAS 2). When IAS 2 rule is not applicable, because the company has crypto assets as assets on its balance sheet, but these are not part of the company's inventories, the provisions of IAS 38 rule will apply.
The Superintendency accepted the conclusions of the ISBD and thus formulated what it called "the doctrinal change." However, it subjected the validity of giving crypto assets as a contribution to the capital stock of a company or of trading with them to the following conditions:
- [That crypto assets] meet the criteria for recognition of inventories or as intangible, in accordance with current regulations on the matter, making a broad disclosure of the economic fact, as set forth in the legal provisions;
- [That] the legal norms that regulate the contribution in kind (articles 122 and following of the Commercial Code and other applicable norms) be fully complied with;
- [That] the associates approve the appraisal thereof, at which point they are jointly liable for the value they have attributed.
This pronouncement represents a complete change of position on the issue of crypto assets. Not long ago, in official letter 220-196196 of September 30, 2020, the same Superintendency had stated that it was not possible to give crypto assets or cryptocurrencies as a contribution to a company because "their legal use is not allowed in Colombia," ruling out outright, even without saying it, the possibility of creating societies around them. It should be noted that this statement is not true. On the contrary, what has been tried to do in Congress on two occasions [1]It is to regulate them, so that their buyers and investors can be protected in some way. The Superintendency, at that time, justified the prohibition based on the warnings made by the different authorities that have ruled on the matter.
This argument, weak at all, seems to have not had much reception within the Superintendency and was quickly replaced by one that puts the country at the forefront of the issue. Colombia opens the doors, in this way, to possible investments in crypto assets on a large scale. Despite this, it goes without saying that the risks that this implies are not minor. It will be the shareholders, making use of their discernment and entrepreneurial ability, who must evaluate the possible benefits and financial risks involved in accepting, in their society, the contribution of an asset as volatile and unstable as cryptocurrencies are. Even more criteria must have those entrepreneurs who decide to negotiate directly with crypto assets.
The Superintendency ends the office of December 14 by remembering that crypto assets (i) are not legal tender; (ii) they cannot be considered currencies since they do not have the backing of any central bank; (iii) they are not money for legal purposes; and, (iv) they do not constitute a value under the terms of Law 964 of 2005. Additionally, it remembers that the issuance of crypto assets may constitute illegal captures of money from the public and that there is the possibility of fraud or failure in their issuance and transfer which may imply the loss of money represented in their respective units since transactions with these are not reversible.
It is important to highlight that those who carry out operations with any type of cryptoactive, must be aware of the risks they are assuming. They will have to respond, at their own risk, for possible failures in electronic systems, for frauds they may suffer, or for illegal activities in which they may be involved when operating with them.
[1] Draft Law 028 of 2018 and Draft Law 268 of 2019.
