Regulation
The Brazilian Tax Department will examine foreign cryptocurrency exchange operations
Brazil Receita Federal is set to increase scrutiny of foreign digital asset exchanges operating within its borders, aiming to strengthen regulation and transparency in the growing sector. The national tax authority tries to collect operational data from platforms such as BinanceCoinbase e Kraken despite the need for a well-defined regulatory framework for cryptocurrencies in the country.
Brazil tightens oversight of foreign cryptocurrency exchanges
As the popularity of digital assets grows in Brazil, the government is moving to understand and oversee the operations of international cryptocurrency exchanges. With a mandate expected to be issued this week, these platforms must disclose their operational methodologies and customer service practices within the region. Brazilian tax authorities are focused on ensuring that these companies adhere to local tax laws
anti-money laundering regulations.
The decision comes at a time when the use of digital assets in Brazil is surging, with cryptocurrency holdings by Brazilians reaching 133.6 billion reais ($24.6 billion) since January in July 2023. This represents a significant increase of 36.6% compared to the previous year. Oversight is key as the government pushes for greater transparency while developing a concrete regulatory framework, which is expected to be proposed by the end of 2024.
Receita Federal to verify international crypto platforms
Andrea Chaves, deputy secretary for inspection at Receita Federal, underlined the need for this initiative. The government aims to verify that these exchanges comply with tax obligations and are not involved in illegal activities. Furthermore, they want to ensure that the services offered to Brazilian customers are completely legal. This comes amid concerns that some platforms may circumvent local regulations, potentially leading to unreported revenue and facilitating illicit financial flows.
Furthermore, Wagner Lima, risk management coordinator at the Revenue Agency, highlighted the need to review the collaboration between exchanges and local service providers. This control ensures compliance with a 2019 regulation that requires the sharing of information, which is fundamental to maintaining its integrity Brazilfinancial systems.
The upcoming ordinance will require exchanges to provide extensive details about their operations, but will exclude specific customer data and transaction information, in compliance with current Brazilian laws. The increase in holdings declared via exchanges, which recorded a 51.2% increase compared to the previous year, highlights the growing importance of these platforms in the local market.
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