The measure, according to local media, would require all locally operating bitcoin service providers to have a physical presence in the nation.
In response to the collapse of one of the biggest cryptocurrency exchanges in the world earlier this month, Brazil’s lower house of Congress late on Tuesday adopted a law that aims to strengthen control of the country’s cryptocurrency business.
The idea will now go to departing President Jair Bolsonaro for approval, with the sector being governed by a federal body chosen by the government. Legal businesses that exchange virtual currencies for real money, trade virtual assets, make transfers, or engage in financial activities related to virtual asset suppliers or issuers are subject to the new regulations.
The measure, according to local media, would mandate that all locally active cryptocurrency providers have a physical presence in the nation, with penalties for breaking the new laws including fines and even jail time. According to the media, the law would grant businesses a grace period for compliance. The action followed the collapse of the Bahamas-based cryptocurrency exchange FTX earlier this month, which sparked an inquiry by Bahamian and American authorities.
According to two persons acquainted with the situation cited by Reuters, 30-year-old founder Sam Bankman-Fried surreptitiously transferred $10 billion of customer assets to his private trading company before to the crisis. Brazilian proponents of cryptocurrencies have supported the legislation, arguing that laws for the sector must be established. According to data from 2022 Chainalysis, the nation is one of the top 10 most active markets for cryptocurrencies globally.
