Brazil’s federal tax department is about to start collecting information on foreign cryptocurrency exchanges operating in the country to ensure that they comply with local Brazilian regulations, Reuters reported on June 18.
The tax authorities are particularly interested in how these exchanges interact with Brazilian service providers and verifying whether they provide the detailed information required under the 2019 regulation.
Andrea Chaves, deputy inspector general, stressed that the tax department’s priority is to find out how foreign exchanges operate in Brazil and whether there are any violations. Chaves also mentioned that the tax department will collect information on Brazilian wealth that is subject to tax.
The tax department is expected to issue a decree by the end of this week requiring compliance by foreign companies, which are not currently required to report their transactions, unlike local exchanges.
Reuters reported that some foreign cryptocurrency exchanges, including Binance, Coinbase, OKX and KuCoin, are operating in Brazil, but this list of exchanges is not complete, meaning that more exchanges may also be active in this market.
Cryptocurrency activity continues to grow in Brazil
As crypto activity increases, individuals and legal entities in Brazil have reported significant growth in the number of cryptocurrencies over the past year. A tax department report shows that in the first half of 2023, Brazil’s cryptocurrency trading volume reached 133.6 billion reais (approximately $24.6 billion), of which 14.5 billion reais (approximately 27 billion US dollars) were traded through foreign exchanges. One hundred million U.S. dollars). Compared with the first half of 2022, these two figures achieved growth of 36.6% and 51.2% respectively.
Brazil's tax authorities are planning to use technology to update and publish new data on the domestic cryptocurrency market. This action reflects the tax authorities' emphasis on cryptocurrency trading supervision and their close attention to market dynamics.
Meanwhile, third-party research firm Kaiko Research revealed significant growth in the Brazilian cryptocurrency market in a report released in May. The report states that in the first five months of 2024, cryptocurrency trading volume in Brazilian reals has reached $6 billion, an increase of 30% compared to the same period last year, and this volume even exceeded that in U.S. dollars. Priced transaction volume.
According to KaikoResearch, Brazil not only leads the cryptocurrency market in Latin America, but also ranks seventh in the cryptocurrency market denominated in fiat currency worldwide. This further proves Brazil's importance and influence in the global cryptocurrency field. #巴西税务 #加密货币交易所 #监管合规
in conclusion
The Brazilian tax authorities' actions reflect the global strengthening of regulation of cryptocurrency exchanges. With the rapid growth of the cryptocurrency market, tax compliance and the updating of regulatory frameworks have become key to ensure the healthy development of the market. Brazil's move may provide a reference model for other countries to regulate foreign cryptocurrency exchanges.
At the same time, this also reminds cryptocurrency exchanges and investors that they must pay close attention to regulatory developments and ensure that their activities comply with local regulatory requirements.
