Understand the proposal to regulate crypto assets that goes to the Chamber

In the spotlight around the world because of the wave of panic last week, in Brazil the regulation of cryptocurrencies is the subject of a bill passed by the Senate at the end of April.

The expectation is that the text, which needs to go through the Chamber of Deputies, will be sanctioned by President Jair Bolsonaro (PL) in the first semester.

In the midst of several scandals involving financial crimes with cryptocurrencies in Brazil, the text changes the Penal Code, which now considers fraud of the type a case of embezzlement.

The project also deals with the obligation of companies in the sector with accountability to Coaf (Council for Control of Financial Activities) and with the protection of customer data. Understand the main points below.

virtual asset

The project considers virtual assets “the digital representation of value that can be traded or transferred by electronic means and used for making payments or for investment purposes”.

The most famous of cryptoassets, bitcoin, is a virtual currency that works through blockchain, a technology that uses thousands of computers around the world to record transactions. The records are practically inviolable, which guarantees the veracity of the value that each enthusiast has in their digital wallet. The process is the same for all major cryptocurrencies circulating on the market.

feather hardening

As investment in bitcoins and other crypto-assets grows, so does the number of Federal Police actions to combat crimes committed through this type of financial asset.

If the law is passed, cryptocurrency fraud will be a case of embezzlement with a penalty of two to six years in prison and a fine. In addition, crimes of laundering or concealment of assets, with sentences of 3 to 10 years, may be increased by one third to two thirds if the crime is committed repeatedly, through a criminal organization or through the use of a virtual asset. .

green mining

The project provides tax exemption for green mining. The exemption covers the purchase, import or industrialization of machines and software for those who use 100% of their electricity needs from renewable sources and neutralize all their emission of greenhouse gases.

“It’s the first legislation I’ve seen that brings together the environmental context, the tax issue and a virtual currency”, says Sabrina Lawder, International Tax leader at Grant Thornton Brazil.

Although she finds the issue sensitive due to the economic moment the country is facing, the lawyer says that measures like this are necessary “to move the economy”.

The exemption does not cover energy, a demand in the sector. “It is something that is not even discussed, unfortunately, because we know that Brazil has a very high energy cost”, says André Horta, founder of Bitcointoyou brokerage. “Entrepreneurs will think twice before mining cryptocurrencies in Brazil. Here next door we have Paraguay, where energy is cheaper.”

consumer safety

Companies must “control and maintain in a segregated way the resources contributed by the clients”, according to parameters to be established by the regulatory agency that will be appointed by the Executive Branch.

This means that the consumer’s financial resources must be separated from any assets of the virtual asset managers – that is, if the operator goes bankrupt, the consumer’s part will be protected.

The text also maintains that companies must respect “information security and the protection of personal data”, in general terms.

light regulation

The law will come into effect 180 days after its approval, when companies that operate with cryptocurrencies will need authorization from a regulatory body to act. Until then, they must only be registered with Coaf and have a CNPJ.

The result of the text was seen as adequate by Julien Dutra, director of government relations at the 2TM group, owner of Mercado Bitcoin. He also works in industry associations, such as ABCripto and ABFitnechs.

“When we talk about technology, we have to think strategically. You can’t weigh it with a pen because the market is still developing, so you have to let it develop from principles”, says he, who compares the bill Brazilian government with the decree signed by US President Joe Biden in early March.

There, regulation is also comprehensive and tries to meet great demands, such as competitiveness, innovation and consumer protection.

“We operators feel even more comfortable knowing that the message about safety for the public behind the counter will be clear,” he says.