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Brazil’s New Proposal Will Make Payments in Crypto Legal

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A proposed amendment to Brazil’s legislation would allow Brazilians to utilize cryptocurrency as a form of payment while also shielding their private keys from being seized by the courts.

On Friday, Federal Deputy Paulo Martins submitted the idea to the country’s legislature. If passed, the measure would broaden both the legal uses of cryptocurrencies in Brazil as well as the ability of courts to seize them.

While crypto-assets are not a currency in and of themselves, they could be “used as a financial asset, means of exchange or payment, or instrument of access to goods and services or investment,” according to the proposed addition to Article 835 of the Civil Procedure Code.

Brazil’s new proposal will not make crypto a legal tender

It would not make Bitcoin or any other cryptocurrency legal tender in the nation. Instead, it would make cryptocurrency a legally recognized financial instrument that could be used for investments and other purposes.

According to one interpretation of the plan, cryptocurrencies like Bitcoin (BTC) and Ether (ETH) might be used to pay for products and services all around the country. It might also be used to settle outstanding debts “in the case of a crypto asset offering or forced restriction.”

The plan also covers the new rights and restrictions that Brazilian courts will have once a cryptocurrency is recognized as a financial instrument, such as the ability to freeze exchange accounts.

However, the proposal does not grant the court the authority to seize users’ private keys:

“The following regulations shall be followed: The Judiciary will not have access to the users’ private key.”

To ensure the payment’s authenticity, the debtor would have to transmit it to the court’s wallet. The proposal is silent on how the court would get cryptocurrency from self-held wallets.

The court would have the right to order “intermediaries” such as exchanges to freeze the debtor’s crypto assets if they retain their crypto on exchanges.

The proposed amendments are still being debated in the country’s legislative chamber, the Chamber of Deputies. This means the Senate may take several years to pass the amendments and the president to sign them into law. They may have radically changed by then.

Gafisa, Brazil’s Real Estate Giant Embraces Bitcoin

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Brazil’s real estate stalwart Gafisa has added Bitcoin [BTC] for transactions through a partnership with cryptocurrency gateway provider Foxbit according to a press release. The latest addition is set to cut third-party entities out of the real estate transaction process, thereby reducing costs.

Partner firm Foxbit stated that Bitcoin would reduce the costs of transactions with quick and final settlements while eliminating the risk of fraud and also being a part of the “disruptive technology would open up whole new opportunities for future growth.

As known, Brazil has always been one of the leading countries for the adoption of bitcoin.

In 2022, Chainalysis reported that Brazil was the largest cryptocurrency market in Latin America based on transaction volume, receiving nearly $91 billion worth of cryptocurrencies in the year-long period between July 2020 and June 2021.

Not only does Brazil rank number six in on-chain value transacted in a report by Chainalysis, but Gafisa houses 1 out of every 130 Brazilians, according to its internal data, thus enabling millions of its citizens to have access to the world’s dominant coin.

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Gafisa, Brazil's Real Estate Giant Embraces Bitcoin 2

Guilherme Benevides, CEO of Gafisa stated,

“Bitcoin is the largest cryptocurrency in market value and, technologically, the most ballast currency in history. It is a currency that is growing in popularity every day, also expanding the possibilities of its use.”

Gafisa CEO says “Bitcoin follows a path of progression”

Benevides continued to explain that BTC follows a path of progression and with the explosion of the digital revolution globally, Gafisa feels digital payments will continue to garner an increasingly high level of presence in emerging economies.

There is a natural tendency to digitize payments,” Benevides explained. “If we stop to think that the Central Bank will launch the digital real in 2022, we can conclude that, in fact, digital is increasingly present in the world.”

Less than a month ago, the Brazilian Senate plenary approved a bill regulating crypto transactions, and then two weeks later the nation’s only stock exchange, B3, laid out plans to launch Bitcoin futures “in the next three to six months,” Chief Financial Officer André Milanez then said in an interview.

Coinbase’s Big Bet On Latin America’s Largest Crypto Brokerage

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U.S. cryptocurrency exchange Coinbase Global Inc is inching closer to a major acquisition deal of 2TM, owner of Latin America’s largest crypto brokerage Mercado Bitcoin. As per a report by a local newspaper O Estado de S.Paulo, the agreement would be finalized by the end of April. However, the news outlet did not disclose the source of the information, adding to its mystery.

The report also mentioned that Coinbase was pitching the idea with Mercado Bitcoin beginning in 2021, as part of its larger effort to expand its operations in the increasingly competitive market. As of now, Coinbase and 2TM made no comment on the development.

Last year in July, Mercado Bitcoin, a Latin American digital assets exchange, has raised $200 million in Series B funding from the SoftBank Latin America Fund. The round enhanced its parent firm 2TM Group’s valuation to $2.1 billion, ranking it among the top 10 unicorns in Latin America. 

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The report further noted that the Brazilian crypto unicorn would help Coinbase gain the necessary leverage required to secure a market leader position in Latin America. Besides Mercado, Coinbase was also eyeing Mexican crypto exchange Bitso as an acquisition target, but apparently, no deal was reached, the newspaper said.

In November 2020, Coinbase announced the creation of an engineering hub in Brazil and opened different positions to expand its team there. Brazil and the other Latin American nations with their large online population, a growing pool of talented developers, and the desire to improve their situation provide a fertile ground for crypto and web3 to take root.

It is not surprising why many crypto bigwigs are making a beeline in the region. In fact, Coinbase’s major rival Binance is on a hunt for similar acquisitions in Brazil, the newspaper said.

Coinbase’s Competitor Binance too gaining inroads in the Brazilian Landscape

Just a few days ago, Binance CEO, Changpeng Zhao, a.k.a CZ announced that the global crypto exchange will be establishing a base of operations in Brazil’s most populous city, Rio. CZ stated that the move is a direct result of an agreement he reached with the city’s mayor during his visit nine days ago where he was also offered a key to the city.

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Binance Gains Foothold In Bahrain and Dubai

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Leading crypto exchange Binance would now be able to offer its service in Bahrain and Dubai. As per sources, the world’s largest digital-asset platform was granted a license from the Central Bank of Bahrain [CBB], to set up shop in the region, increasing its footprint in the Middle East. The news assumes significance as it is Binance’s first such regulatory approval in the Gulf area.

The permit will enable the crypto firm to provide digit-asset trading, custodial services, and portfolio management to customers under the supervision of the Bahrain regulators. As per a Bloomberg report, the cryptocurrency exchange also obtained a license to be the first anchor in Dubai World Trade Centre, an economic free zone. Speaking on the same, CEO Changpeng Zhao a.k.a CZ stated,

“This landmark achievement for Binance represents our first license as a crypto-asset provider in The Cooperation Council for the Arab States of the Gulf [GCC] and demonstrates our commitment to being in regulatory compliance as the first of its group of companies in the region.”

Binance eyeing opportunities in non-crypto industries

In a back-to-back development, the global crypto exchange signed a Memorandum of Understanding [MoU] on 14 March seeking to explore the acquisition of Brazilian securities brokerage Sim;paul Investimentos. According to the company’s website, Sim;paul founded by João Silveira in 2019 is a securities brokerage firm regulated by both the Central Bank of Brazil and the Securities and Exchange Commission [CVM].

As stated in the press release, the move is intended to further develop the cryptocurrency and blockchain ecosystem in Brazil. On establishing the formal agreement, CZ noted,

“In a fast-developing market like Brazil, crypto can transform and facilitate people’s lives and as such, we believe in full collaboration with local authorities that Binance has a lot to contribute in developing the community and ecosystem in Brazil.”

Having said that, completion of the transaction would require a green signal from the administrative authorities, including the Central Bank of Brazil. Previously in August, Binance had to halt trading of crypto derivatives products such as futures contracts on its Brazilian platform to comply with local regulations.

Brazil Inches Closer Towards Regulating Crypto; Committee Approves Bill

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Brazil’s economic affairs committee on Feb 22 unanimously gave the bill a green signal for regulating digital assets. The recent move if accepted by the full Senate and is signed by its President Jair Bolsonaro would make it the largest Latin American nation to have legalized crypto transactions.

The proposed bill specifies digital assets and categorizes their service providers, thus giving the government power to determine which body will be responsible for regulating business with cryptocurrencies. According to Sen. Iraja Abreu who backed the bill, expects this responsibility will fall on the central bank, which helped construct the legislation.

In addition to that, the bill requires virtual asset service providers to act against money laundering while combating criminal elements, terror financing, and the spread of weapons of mass destruction.

The latest developments come on the same day Russia’s Finance Ministry submitted a draft crypto regulation law that said digital currencies are only available as an investment tool and not as a means of payment.

Having said that Brazil is considered by several global exchanges who see the country’s potential as Latin America’s main market in 2022.

Brazil emerges as the hottest Latin American market for crypto exchanges

The obsession began in 2020 when crypto exchanges began to notice that Brazilian stablecoin traders were quadrupling in number. By 2021, locals traded $11.4 billion in stablecoins, while bitcoin trading reached $10.8 billion over the same period.

Moreover, Brazilians have incentives to buy crypto instead of U.S. dollars to hedge against inflation or devaluation. Despite the country being embroiled with economic imbalances, the region continues to attract major crypto players such as Binance, Coinbase, and Crypto.com.

Not only that, the global payments company Ripple considers Brazil to be the key driver of growth in Latin America. Even regional crypto exchanges already operating in Spanish-speaking markets are also eyeing Brazil.

In the latest development, Brazil-based crypto exchange Foxbit has secured $21 million in a Series A funding round led by OK Group. Founded in 2014 by João Canhada and Luís Augusto Schiavon, the firm at the moment boosts around 950,000 customers, according to its website.

How Brazil’s Bitcoin Pyramid scheme Kingpin made his way to the top

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Brazil’s Cabo Frio is dubbed as the ‘New Egypt’ for its various Pyramid schemes operating in the town along with its ringleader Glaidson Acácio dos Santos who is referred to as the Bitcoin Pharoah. Dos Santos as per police sources began trading in Bitcoin after leaving his job as a waiter in 2014. A part-time evangelical preacher in training, he recruited clients from Churches earning a referral fee for bringing in fresh recruits.

By 2017, the accused was earning a lot of money which attracted the authorities’ attention. In the same year, his firm which goes by the name of GAS consulting and technology’s total transactions amounted to 10 million reais [$1.8 million], 15 times more than the previous year. The country’s financial intelligence unit also noticed the firm which was registered as a restaurant regularly traded cryptocurrency on online exchange platforms.

Things finally came to an end when in April 2021, Brazil’s federal police caught red-handed two men and a woman loading a chopper with $1.3 million in neatly packed bills. Police sources said that the fraud firm owned by 38-year-old dos Santos had total transactions worth nearly $7 billion from 2015 through mid-2021 as part of a Bitcoin-based Ponzi scheme that promised investors 10% monthly returns.

As for Santos, he is currently lodged in a Rio jail awaiting trial on charges that includes racketeering, financial crimes, and ordering the killings and attempted murder of two business competitors.

Brazil’s crypto obsession turned fatal

The case reflects the growing appetite for cryptocurrencies in Brazil, where years of economic and political upheaval have made digital currencies an attractive cover against the depreciation of the Brazilian Real and double-digit inflation.

The craze for digital assets especially peaked in Cabo Frio, the seaside town of 230,000 where the office of the kingpin was located. As G.A.S. revenues surged, many copycat firms sprang up, hoping to reap the benefits. Soon a wave of cryptocurrency-related violence followed leading to several murders.

Experts feel that Brazil’s lenient laws regulating cryptocurrency helped fuel the rise of dos Santos. Additionally, Brazil’s securities regulator was making digital currencies more attractive. In fact, in 2018 it authorized the country’s investment funds to invest in cryptocurrencies, giving further credibility.

Brazil’s Rio de Janeiro aims to invest 1% in cryptocurrency; soon to launch Crypto Rio

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Brazil’s Rio de Janeiro is increasing its efforts to facilitate bitcoin adoption. Recently Rio mayor Eduardo Paes expressed his intention to create Crypto Rio and transform the city into a tech hub as well as allot 1% of its reserves in the digital asset industry. Paes in a decree published on 14th January 2022 announced the creation of a working group to explore opportunities in incentivizing the use of crypto and boost the city economy, such as offering discounts when paying taxes with Bitcoin. 

According to the decree, digital asset might also used to fund city projects. The working group is set to publish the results of its study in 90 days. Pedro Paulo, secretary of finance and planning of the city, at the event on Thursday said:

We are going to launch Crypto Rio and invest 1% of our public funds in cryptocurrency, We are studying the possibility of paying taxes with an additional discount if you pay with bitcoins. You take the discount off the single quota of 7% (of the IPTU), it becomes 10% if you pay in bitcoin. Let’s study the legal framework to do this.

If succeeded, Rio will become the first Brazilian city to hold bitcoin on its balance sheet. Last year, El Salvador became the first nation to buy bitcoin on its balance sheet. The central American country presently holds nearly 1,390 bitcoins, worth more than $58 million at current prices.

The recent developments reflects a positive stance of the brazilian administration towards the digital asset industry.

Brazil advancing towards legalizing Bitcoin

Previously a crypto bill that that allowed workers to accept Bitcoin as their salary was approved by the Chamber of Deputies of the Brazilian Congress in the early days of December 2021and is currently awaiting review by the Senate. Federal Deputy Luizão Goulart, a congressman, went on to propose a bill to legalise crypto payments as a mode of payment for public and private sector workers.

The project, known as Bill 2303/15 and proposed by Deputy Aureo Ribeiro, establishes definitions for exchanges and virtual currencies. It also requires a central body to monitor all cryptocurrency-based operations, which will be appointed by the executive branch of the government. 

Brazil’s BTG Pactual launches crypto trading platform mynt as users number spikes

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With each passing day, the world of digital assets seems to become closer and closer to mainstream adoption. The latest news from Brazil was a positive marker for an industry going through a bear market. On Tuesday, Brazil’s BTG Pactual launched its native platform for virtual assets trading.

South America has become a hotspot for cryptocurrency adoption with several countries considering cryptocurrencies as a legal tender. Brazil’s focus on crypto was helped along by a rapid influx of new traders into the ecosystem. BTG had earlier expressed their interest in entering the cryptocurrencies as the Mynt platform worked towards achieving that goal.

As of now, Mynt platform users can purchase Bitcoin and Ether in a few quick steps. The bank further added that it had plans to add other cryptocurrencies to it’s roster in the future. Post the latest announcement, BTG Pactual’s head of digital assets Andre Porhilo said:

“At this first moment, we will have the two main assets of the market but we will include other cryptos for trading over time. We will have a complete platform with blockchain-based assets. With the support of BTG Pactual, Mynt has fundamental differentials in security and credibility characteristics that are fundamental in a new category of investments with which most people are not used to.”

Officials close to the bank claimed that the massive demand for cryptocurrency trading amongst users was the main factor for Mynt’s origins. BTG Pactual CEO Robert Sallouti also informed the public that the company would take the onus of informing the public of the burgeoning market. The bank plans to launch educational content about blockchain and virtual assets with the mission of acclimatizing the new entrants.

BTG Pactual’s foray into cryptocurrencies has also made it the first major institution in Brazil to do so. The bank assured users that the platform was being assessed by the Brazilian Securities Commission and the local central bodies for total credibility. We now have to wait and watch how the platform takes of in the South American country.

Brazilian central bank head recognizes crypto and hopes to regulate it

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The Brazilian central bank president, Roberto Campos Neto seems to have jumped on to the crypto bandwagon. However, he hopes to focus mostly on the regulatory side of it.

The demand for crypto witnessed parabolic growth over the year. Just as the world started exploring the digital space, cryptocurrencies have started to boom. From the average Joe to celebrities and even government officials were seen embracing digital assets. The value of the entire industry not only rose to a high of $2 trillion, the price of Bitcoin [BTC] hit a whopping $64K which further lured in several new investors into the market. As the demand for these assets grew, authorities began taking immense interest in the market. The fact that it wasn’t entirely regulated was alarming to many.

Expressing concerns about the same, the president of the Brazilian central bank, Roberto Campos Neto went on to speak at an online conference formulated by the Council of the Americas.

Brazilian central bank Prez talks crypto

Campos Neto primarily spoke about his views on crypto and regulating the entire space. The Brazilian central bank head has been expressing his interest in crypto for quite some time now. Noting the swiftly changing financial market, Campos Neto stated,

“The financial market is changing so much that it’s all becoming data. We need to reshape the world of regulation.”

Regulations are an essential part of every industry. Authorities have began realizing the importance of regulating the crypto-verse particulalry after the impeccable growth of the industry. While the market hoards thousands of crypto assets and platforms, governments are trying to filter out the scammy ones.

Further elaborating on the importance of regulations, Campos Neto said,

“How can we reshape the word ‘regulation?’ Finance will become about data. It will be impossible to regulate financial transactions without understanding the regulation of data.”

US Officials Aid Brazilian Govt In $24M Crypto Bust

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Ponzi schemes and scammy projects continue to take over the crypto-verse. While the US has been fending off scammy projects, other countries have been following suit. However, a collaboration between the Brazilian and the United States’ government has resulted in a big crypto bust.

US Department Of Justice Working Closely With Brazilian Officials

In a recent release, the Department of Justice of the United States revealed its latest bust of an online fraud involving cryptocurrency. The Brazilian government reportedly urged the US government to assist them in the case as it entailed a large cryptocurrency fraud scheme. “Operation Egypto” as labeled by the Brazilian federal police, was handed over to the US government and the latter went on to seize up to $24 million worth of cryptocurrency.

Brazilian law enforcement revealed that a whopping $200 million worth of profits was made through this fraudulent scheme. They further estimated that more than tens of thousands of Brazilians were victims of this scammy project. The project mainly focused on soliciting money from individuals. The involvement of crypto was reportedly very minute in the case as the convicts were returned very little money to the investors. The release further read,

“Solicitations referred to as innovative investment opportunities were made over the internet and in person, offering investments in cryptocurrencies. As alleged, the defendants solicited investors to give money to corporations they controlled, in the form of Brazilian currency or cryptocurrency, which the companies would then invest in a variety of virtual currency types.”

While the US government focused on Brazilian Marcos Antonio Fagundes, the Brazilian federal prosecutors went on to charge several in light of the same case. Fagundes was charged with several counts by the US government following the information provided by the Brazilian officials. Fagundes, as well as the other convicts, carried this operation out from August 2017 all the way to May 2019.

This latest bust and collaboration was carried out under the Treaty between the United States of America and the Federative Republic of Brazil on Mutual Legal Assistance in Criminal Matters.