Brazilian Cryptocurrency Exchanges Getting Hammered by the Country’s New Tax Laws

Brazilian Cryptocurrency Exchanges Hit Hard by New Tax Laws

Brazilian Cryptocurrency Exchanges News (Feb. 18, 2020) – Some countries have taken a laissez-faire approach toward cryptocurrency, while others outright banned virtual currencies like Bitcoin and altcoins.

Since inception, Latin America has been generally receptive of the new monetary system. However, some of the content’s countries have begun taking steps to regular the space; starting with crypto exchanges.

Brazilian cryptocurrency exchanges regulations

Recently, Brazil’s Department of Federal Revenue (in Spanish: Secretaria da Receita Federal do Brasil) authorities have been actively involved in regulating crypto exchanges in the country.

On August 2019, Brazil released several tax codes specifically targeting crypto exchanges. Two popular crypto trading platforms, Acesso Bitcoin and Latoex; have already shut down due to the nature of the new tax codes.

Regulators threaten Brazilian cryptocurrency exchanges with heavy fines should they violate the new new tax regulations. Shortly after, the two exchanges voluntarily ceased operations.

Pedro Nunes, Acesso Bitcoin co-founder and CEO, specifically cited the new tax rules as sole reason for shutting down the exchange.

“After the Federal Revenue Service introduced these rules we noticed a significant decrease in the traded volume. We also feel that the market has cooled off for smaller exchanges.”

One of Acesso Bitcoin’s competitors, Latoex also closed following the publication of the crypto tax laws. Brazilian cryptocurrency exchanges face fines of up to 100,000 Brazilian real (BRD) ($23,105.90 USD) for each violation.

Current cryptocurrency regulations / laws in Brazil

At the time of this writing, Brazil does not have a unify law dealing with cryptocurrency and exchanges. All Brazil-based crypto trading platforms operate under the Department of Federal Revenue regulatory code No. 1888.

Under code No. 1888, all Brazilian cryptocurrency exchanges must report users’ transactions or face 500 BRD to 1500 BRD (120 to 360 USD) in fines per unreported transaction.

Recently, National Congress of Brazil introduced three bills aims at broader regulations for the crypto industry.

The bills are: 2303/2015, PL 3825/2019 and PL 3949/2019. Neither of these bills have been accepted put into affect, as of February 18, 2020.

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