Brazil’s Special Department of Federal Revenue is taking significant steps to regulate foreign crypto exchanges operating within the country. The tax department has announced plans to collect information from these exchanges to ensure their compliance with local regulations. This move comes as a response to the growing concerns regarding the operations of foreign exchanges and their interaction with local service providers.
Focusing on Compliance and Taxation
Deputy Secretary of Inspection Andrea Chaves emphasized the importance of understanding how foreign exchanges operate in Brazil. The tax department aims to determine whether these exchanges are engaging in any illegal activities. In addition to assessing their operations, the department will also gather information on Brazilian wealth that should be subject to taxes. By requesting details from foreign exchanges, the tax department hopes to improve transparency and accountability within the crypto market.
Unlike local Brazilian exchanges, foreign companies are not required to report transactions to the tax department. To address this issue, the department will release an ordinance summoning foreign exchanges to provide the necessary information. Some of the prominent foreign exchanges identified by Reuters include Binance, Coinbase, OKX, and KuCoin. However, this list is not exhaustive, indicating the widespread presence of foreign exchanges in Brazil.
Recent data from the tax department reveals a significant increase in crypto reporting by individuals and legal entities. In the first half of 2023, a total of 133.6 billion reals ($24.6 billion) worth of crypto assets were reported, with 14.5 billion reals ($2.7 billion) coming from foreign exchanges. These figures represent substantial growth compared to the previous year, highlighting the surge in crypto activity in Brazil. The tax department plans to release updated data using advanced technological tools to enhance monitoring and compliance efforts.
Rising Crypto Trading Volume in Brazil
Third-party research reports further corroborate the growth of the crypto market in Brazil. According to Kaiko Research, crypto trading volume involving the Brazilian real surpassed $6 billion in the first few months of 2024, showing a 30% increase from the previous year. This volume outpaces trading volumes in US dollars, indicating the growing influence of the Brazilian crypto market. Brazil now stands as the largest crypto market in Latin America and the seventh-largest fiat currency market globally.
Leave a Reply