Summary of the News Highlights
- The Brazilian Federal Revenue Service (RFB) intends to gather data regarding foreign cryptocurrency exchanges that are currently operating within Brazil.
- The companies’ representatives will be summoned shortly to supply data.
- The government intends to assess the adherence of these exchanges to domestic legislation.
- The digital asset market is experiencing a surge in interest due to heightened engagement from Brazilian users.
Initiative by the Brazilian Tax Authority
Reuters has reported that the Brazilian Federal Revenue Service (RFB) plans to collect information on the activities of foreign cryptocurrency exchanges operating in the country. The RFB plans to issue an official request and summon representatives of these exchanges to gather additional information.
Adherence to Local Regulations
The authorities seek to ascertain whether these exchanges are breaching any local laws in their operations. The RFB is likewise interested in the relationships between these exchanges and local virtual asset service providers.
Andrea Chaves, the Deputy Secretary for Inspections at RFB, raised concerns over the legality of the operations carried out by these foreign firms. “We have concerns regarding the operational procedures in this establishment, including the possibility of engaging in illicit activities, as well as the availability of data pertaining to taxable assets held by Brazilian individuals,” Chaves expressed.
Foreign exchange institutions operating in Brazil
Multiple international cryptocurrency exchanges are operating in Brazil without having their headquarters located in the country. These exchanges include:
Binance and Coinbase
KuCoin has experienced a surge in interest about digital assets.
The RFB’s increased interest is occurring simultaneously with a significant rise in activity among Brazilian users. According to the tax administration, Brazilian citizens reported a total of $24.6 billion in cryptocurrency from January to July 2023, representing a 36% growth compared to the previous reporting period. The total sum of $2.6 billion was deposited in international cryptocurrency exchanges, indicating a growth of 51.2% when compared to the corresponding period in 2022.
Volume of trade denominated in Brazilian Real
According to data provided by the analytics firm Kaiko, the trade volume of cryptocurrencies linked with the Brazilian real (BRL) amounted to $6 billion between January and April 2024.
Advancements in legislation
Recently, the Brazilian Senate approved a bill that enforces a 15% tax on income generated from digital assets.
In conclusion
The Brazilian Federal Revenue Service’s decision to closely examine overseas cryptocurrency exchanges underscores the increasing regulatory attention on the digital asset industry. The RFB is taking action to guarantee that local users comply with local rules and properly pay taxes on their digital assets, given the growing activity and substantial quantities of cryptocurrency holdings. To stay up-to-date, follow this pertinent Twitter account.
