Brazil’s Department of Federal Revenue, or RFB, published a document which shows that Brazil-based crypto exchange platforms would be required to submit detailed monthly reports on each of their cryptocurrency-related operations.
Those who don’t report will face penalty
Individuals and companies that use digital assets in Brazil will have to report cryptocurrency-related transactions that exceed $2,700, or 10,000 Brazilian reaIs. Those who fail to do it would be fined in an amount that would depend on whether the report was false, wrong or just delayed.
According to the RFB, crypto buyers and sellers transferred $1n billion, or 4 billion reaIs, in Brazil to buy and sell crypto coins like BTC in December 2017. The annual trading volume of crypto is expected to be between 18 and 45 billion reaIs by the end of 2018, given the growth of the crypto industry in the country.
The RFB said, “In Brazil, there has been a significant increase in the cryptoasset market in recent years, which demonstrates the relevance of the cryptoasset market in the country, mainly for the tax administration, since transactions are subject to income tax on the capital gains eventually earned.”
The RFB document said that the number of user accounts on crypto operators has surpassed the number of user accounts which were registered on the Sao Paulo stock exchange. According to the media outlet CCN, the country’s biggest investment firm, XP Investimentos, has launched a cryptocurrency exchange dubbed XDEX. Huobi, a leading crypto exchange, has also expanded its operations to Brazil.
Corruption a serious concern
Corruption and money laundering are two of the main concerns in the country. This comes especially after Brazilians elected Jair Bolsonaro as President. Bolsonaro has pledged to end corruption in the country.
The CVM, Brazil’s main regulatory authority of Brazil, has released a comprehensive document which provides guidance to fund managers who want to add digital currencies to their portfolios. It offers guidance on indirect investments in crypto, and calls attention to illegal operations. These include fraud, price manipulation, and money laundering. The document warns of the importance of avoiding fraudulent cryptocurrencies.