Chamber of Deputies approves bill that regulates cryptocurrencies in Brazil

RIO DE JANEIRO, BRAZIL – Brazil is closer to having laws regulating the cryptocurrency sector in the country. Bill (PL) 2303/15, which deals with the subject, was approved on Wednesday (7) in a vote at the Chamber of Deputies. The text will now be sent to the Senate for a vote.

The bill has been in the House for several years and seemed to be on its way to a vote early last year when the pandemic changed the congressmen’s schedule and delayed its advance.

PL 2303/15 creates a supervisory body to be appointed by the government, responsible for authorizing and controlling the operation of crypto brokerage houses.

In addition, the approved text adds, in the Criminal Code, a new criminal offense of fraud, imposing prison terms of 4 to 8 years and a fine for those who “organize, manage, offer or distribute portfolios or intermediate operations involving virtual assets, securities or any financial assets to obtain illicit advantage to the detriment of others, inducing or keeping someone in error, through deception, trickery or any other fraudulent means.”

Companies connected to this market must also share more information with government agencies.

In a change made a few months ago, the text of the PL made clearer the definition of the term “virtual assets” used in the text, stating that it refers to the “digital representation of value that can be traded or transferred by electronic means and used for payment or investment purposes”. It thus would prevent the Brazilian CBDC, known as the Digital Real, or frequent flyer program points, securities and international currencies such as dollars and euros, from coming within this definition.

The text also establishes the criteria for companies to fit into the category of crypto brokerage houses (or “exchanges”) and lists a series of duties and conditions that these companies will be required to fulfill. Companies will have six months to adapt to the new rules.

PL2303/15 also creates guidelines for the crypto market, which should be based on good governance practices and a risk-based approach; information security and protection of personal data; protection and defense of consumers and users; and prevention of money laundering, terrorism financing, and financing of the proliferation of weapons of mass destruction, in alignment with international standards.

The project’s rapporteur, Expedito Netto (PSD-RO), said it is likely that the Central Bank will be appointed as the body responsible for overseeing the crypto market in the country, and reinforced that the text is only a guide so that the government has concrete means to supervise the sector.

“We have to give security to those who believe in virtual currencies but put an end to pickpocketing, crimes such as money laundering, among others. Our country is not a banana republic, it is serious, and we are legislating the matter,” he said.

“We need to take care of this market and investors. We are voting for a libertarian law regulation. Whoever wants to create financial pyramid schemes will be punished,” said deputy Aureo Ribeiro, author of the text, when deputies from the NOVO and PSDB parties tried to remove the bill from the agenda, which ended up not happening.

PL 2303/15 will be discussed and voted in the Senate, at a date still to be determined. If approved, it will be sent to the President for sanction.

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