Brazil Fights Cryptocurrency Crime Through Licensing Requirements and Pre-Trial Asset Liquidation
- Brazil introduces crypto licensing rules and pre-trial seizure laws to combat crime and regulate its $319B market. - New framework requires VASPs to secure $2M-$17.8M capital, comply with AML/cybersecurity standards, and report stablecoin transactions. - "Anti-faction bill" enables authorities to liquidate seized crypto during investigations, targeting gangs like Comando Vermelho. - Critics warn strict rules may stifle small firms, while regulators defend alignment with traditional finance standards.
Brazil's central bank and government are moving forward with a twofold strategy to tackle organized crime and bring oversight to its rapidly expanding crypto industry. New regulations will require crypto businesses to be licensed, and a legislative proposal would allow authorities to sell confiscated digital assets before trials conclude. These initiatives are designed to counter the increasing use of cryptocurrencies for illegal purposes and to establish Brazil as a regulatory frontrunner in Latin America.
The central bank’s updated regulatory structure, which takes effect in February 2026, will require all virtual asset service providers (VASPs)—such as exchanges, custodians, and brokers—to obtain official approval by November 2026, as
This regulatory initiative is part of Brazil’s larger plan to weave crypto into its financial landscape. With a crypto market valued at $319 billion—representing nearly a third of Latin America’s total—the government has stressed the importance of fighting fraud and money laundering, as mentioned in the
Alongside these regulatory changes, President Luiz Inácio Lula da Silva has put forward the "anti-faction bill," which would let authorities liquidate seized cryptocurrencies during criminal probes, treating them similarly to foreign currency or securities, as
Some critics believe the short compliance window and steep capital requirements could hinder competition, especially for smaller players, as noted in the
Together, these regulatory and legislative efforts demonstrate Brazil’s ambition to take the lead in digital asset regulation. By bringing crypto under foreign exchange rules and enabling prompt liquidation of seized assets, the country seeks to stem illegal financial flows and promote a transparent market. Nonetheless, challenges persist, such as guaranteeing fair valuation of confiscated crypto and safeguarding defendants’ rights in the event of acquittal, as mentioned in the
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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