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The bill is now set to become law once signed by the President.
The long wait is finally over, as the Chamber of Deputies gave a nod of approval to a Brazilian crypto bill seeking to regulate the country’s crypto space. The move follows after the bill remained stuck in the chamber since April when the Senate initially approved it. According to a Reuters report, backing the bill was important to Congress as it will help to keep the crypto industry sanitized.
Brazilian Crypto Bill Aims to Protect Investors
The bill, which was proposed by deputy Aureo Ribeiro, seeks a regulatory tenure for Brazil that will ensure that investor funds are well protected. To do this, part of the bill proposes that a government-appointed federal agency will perform oversight duties for the entire sector. The bill proposes that crypto assets considered to be securities should be regulated by the Brazilian Securities and Exchange Commission (CVM). However, it also suggests that another regulator be appointed by the presidency, for digital assets that are not securities. Although, expectations are that the Central Bank is likely to be chosen for that role.
Furthermore, the bill also proposes what could be termed as ‘criminal’ in the operations of virtual services providers. Among which is the failure to secure an operational license or involvement in fraudulent activities of any kind. The new rules also include businesses in the industry having to own at least, a branch at a physical location within the country. Defaulters of any of the rules will be required to pay fines or even serve prison sentences in worst-case scenarios.
For now, however, the rules are yet to be passed into law. That is pending the last phase of approval which will see the outgoing President, Jair Bolsonaro, sign it into law.
Extends Grace Period Gesture amid FTX Collapse
For what it’s worth though, it may be difficult for exchanges, businesses, and private individuals that may be affected by these rules to comply. Therefore, a 180-day grace period has been set to allow them to put their houses in order. Only after the window, will regulators begin to enforce the new rules.
It should be noted that the recent collapse of giant crypto exchange FTX may have played a part in the increased rate of global regulatory approvals. This is as lawmakers and regulators continue to look for ways to secure investor funds whilst not stifling technological innovations.