Brazil’s Crypto Clampdown: Battling Tax Dodging or Driving a Decentralized Migration?

Brazilian Tax Authority Strengthens Crypto Disclosure Rules, Focusing on Overseas Exchanges and DeFi

Brazil’s Federal Revenue Service has announced significant changes to its cryptocurrency reporting regulations, now requiring foreign exchanges and decentralized finance (DeFi) platforms to report transactions involving Brazilian clients. These regulations, which will take effect in 2026, bring Brazil in line with the Organisation for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF). The aim is to reduce tax avoidance and improve monitoring of international digital asset transactions. According to the revised guidelines, both individuals and organizations must declare crypto dealings that surpass R$35,000 ($6,300) per month, covering activities on both centralized and decentralized platforms, including airdrops, staking, and stablecoin movements.

The new measures also apply to international exchanges operating within Brazil, obligating them to provide user transaction records to the tax authorities.

about unchecked crypto transactions, which officials believe result in more than $30 billion in lost tax income and customs fees each year. , now play a pivotal role in Brazil’s digital asset market, making up about two-thirds of trading activity in the first half of 2025. The central bank as foreign exchange operations, meaning they are now subject to the same regulations as traditional currency trades.

The revised regulations also encompass DeFi activities, which previously existed in a largely unregulated space. The Federal Revenue Service clarified that these steps are intended to enforce tax compliance, not hinder technological progress. “This isn’t about collecting data—it’s about making sure everyone fulfills their tax responsibilities,” stated Andrea Costa Chaves, the agency’s Subsecretary of Inspection. Nonetheless, some critics warn that these requirements could push users toward less traceable decentralized options. The Brazilian Association of Cryptoeconomics (ABcripto) cautioned that the heavier compliance load might drive local businesses to seek out less regulated platforms.

Political friction has surfaced as lawmakers question the new tax structure.

aims to exclude long-term crypto investors from capital gains taxes, arguing that current rates are excessively burdensome. The Finance Ministry has yet to respond to the bill, but the discussion reflects the ongoing tension between regulatory control and industry expansion. At the same time, the central bank for crypto exchanges and custodians, further embedding digital assets into Brazil’s financial sector.

These adjustments come as Brazil adopts CARF, the international standard for tax data sharing.

exchanging crypto transaction information with other OECD countries, following similar moves by the U.S., EU, and UAE to fight tax evasion. The Federal Revenue Service’s DeCripto reporting platform, , will formalize these obligations, including required KYC/AML procedures for foreign services catering to Brazilian users.

Industry analysts suggest that this regulatory shift could transform Brazil’s crypto market.

crypto market, Brazil handled $318.8 billion in digital asset transactions from July 2024 to June 2025—almost a third of the region’s total. While the new tax rules are meant to close loopholes, they could also make compliance more challenging for smaller investors and companies. The Brazilian Association of Tokenization and Digital Assets (ABToken) voiced concerns about the “legal uncertainty” stemming from cross-border compliance requirements.

With these regulations taking shape, Brazil’s crypto industry is preparing for a period of transition.

of increasing revenue and aligning with global standards highlight its commitment to integrating digital assets into a regulated financial system while tackling fiscal issues.