Senate Committee Approves Bill to Regulate Financial Transactions with Cryptocurrency

The CAE (Commission on Economic Affairs) of the Senate unanimously approved this Tuesday (22) a proposal that regulates financial operations with cryptocurrencies in Brazil and includes fraud with these digital currencies within the scope of the penal code, with a penalty of four to four years. eight years in prison.

The proposal was approved by 14 votes in favor and none against, in a final character. Therefore, it goes straight to the Chamber of Deputies — unless a request is presented with the signature of nine senators, asking for a vote in plenary.

The rapporteur of the matter, Senator Irajá (PSD-TO), built a single substitutive project from three other articles on the subject being processed in the commission. The text has been called the ‘regulatory framework for cryptocurrencies’, although it still needs an act from the Executive Branch to establish some of the main guidelines.

The numbers of this market in Brazil arouse the attention of the authorities. According to information from the Federal Revenue Service passed on to the Central Bank, the sector moves around R$ 130 billion in the country per year and lacks legal regulation that gives security to those involved.

In 2020 and 2021, Brazilian investors were harmed in more than BRL 6.5 billion, according to the Federal and Civil Police of São Paulo.

report of sheet showed that the BC is hastening the elaboration of guidelines to impose supervision of financial transactions with cryptocurrencies in Brazil to stop the increase in billionaire scams and fraud.

Faced with this scenario, Irajá determined that the Executive Branch establish rules in line with international standards to prevent money laundering and concealment of assets, and to combat the activities of criminal organizations.

“Our objective is to stimulate the business environment, not to stifle it, but to create mechanisms that can protect good investors, individuals, legal entities, liberal professionals and the self-employed who see an investment opportunity within a business environment that is suitable”, said the rapporteur.

In the proposal, the senator established that the Executive Branch will be responsible for defining which bodies will regulate and supervise business with cryptocurrencies. Its text, therefore, changes the original articles, by Senators Soraya Thronicke (PSL-MS) and Flávio Arns (Podemos-PR), who pointed out, respectively, that the Federal Revenue and the Central Bank should be the regulators of this market.

The approved text also provides that it is up to the Central Bank to grant authorization to institutions that “may exclusively provide the service of virtual assets, or cumulate it with other activities, in the form of the regulation to be edited by a body or entity of the Federal Public Administration indicated in an act of the Federal Executive Branch”.

Irajá maintained the idea of ​​establishing a National Register of Politically Exposed Persons (CNPEP), suggested in other articles on the subject, but defined that it will be up to the CGU (Comptroller General of the Union) to standardize this register.

The text adds that institutions authorized to operate by the Central Bank must consult the CNPEP for the implementation of money laundering prevention policies.

The bill approved by the members of the commission also establishes changes to criminalize fraud involving cryptocurrencies, especially when they are a financial pyramid crime.

One of these points includes mechanisms in the legislation on money laundering or concealment of assets, to give more transparency to cryptocurrency operations. It provides, for example, that institutions that operate these digital currencies will be subject to rules to prevent fraud, such as identifying their customers and keeping records of all transactions that exceed the limit set by the competent authority.

If the operation exceeds this limit, virtual asset service providers will have to notify Coaf (Council of Financial Activities Control) within 24 hours, as required by law.

After the law is sanctioned, according to the proposal, companies providing services of virtual assets that are already in activity will have at least six months to adapt to the new rules.

Regarding fraud, the text advances on two fronts. In one of them, it establishes that the operators of virtual assets will also be included in the legislation of crimes against the financial system. Authors who defraud inspection or present false documents will be subject to penalties, with a prison sentence of one to five years.

It also amends the Brazilian penal code to include the crime of cryptocurrency fraud, which will carry a prison sentence of four to eight years in prison. In this case, those who “organize, manage, offer portfolios or intermediate operations involving virtual assets, with the purpose of obtaining an illicit advantage, to the detriment of others, inducing or keeping someone in error, through artifice, ruse, or any other fraudulent means “.