Crypto Compliance and Travel Rule Regulations in Brazil

Crypto Travel Rule Regulations in Brazil

Breaking Down Compliance Requirements in Brazil’s Crypto Ecosystem

Who Needs to Register?

All Crypto Asset Service Providers (CASPs) operating in Brazil must comply with regulations enforced by the Brazilian Central Bank (BCB) and the Special Department of the Federal Revenue of Brazil (RFB). Registration includes providing details about company governance, operations, and compliance frameworks to ensure alignment with Brazil’s robust regulatory standards.

When Did the Travel Rule Begin?

Brazil implemented the Travel Rule as part of its commitment to aligning with FATF (Financial Action Task Force) Recommendation 16, enforcing it on August 1, 2023. This marked the beginning of stricter oversight of crypto transactions in the country.

Is Brazil Impacted by MiCA?

While Brazil is not directly influenced by the EU’s Markets in Crypto-Assets (MiCA) regulation, its regulatory framework is evolving rapidly. Brazilian CASPs should pay attention to global standards, including MiCA, to remain competitive and compliant in the international market.

Is There a Transaction Threshold?

Yes, in Brazil, the Travel Rule applies to transactions exceeding BRL 10,000 (approximately USD 2,000). CASPs are required to collect and share identifying information for such transactions, ensuring oversight for high-value activities.

What Information Must Be Shared?

CASPs in Brazil must collect and transmit detailed information about both the originators and beneficiaries of transactions, including:

• Full name and address,
• National ID or CPF number,
• Date of birth,
• Account number or unique transaction ID.

Self-Hosted Wallet Requirements

Transactions involving self-hosted wallets are not exempt from regulations. CASPs are required to implement the same AML/CTF measures, including enhanced due diligence for higher-risk transactions.

Key Highlights of Crypto Compliance in Brazil

1. Legality of Cryptocurrency in Brazil
   Cryptocurrency is legal in Brazil. Residents can trade, invest, and hold digital assets. With the Cryptocurrency Law 14,478, effective January 2023, Brazil established a strong regulatory framework for crypto activities.
2. Anti-Money Laundering (AML) Measures
   CASPs in Brazil must implement stringent AML/CTF controls as required by the BCB and RFB, including:
   • Verifying customer identities (KYC),
   • Monitoring transactions for suspicious activities,
   • Reporting unusual transactions to the appropriate authorities.
3. Travel Rule Enforcement
   Brazil’s enforcement of the Travel Rule is in line with FATF standards, requiring CASPs to collect and share identifying information for cryptocurrency transactions exceeding BRL 10,000.
4. Regulatory Oversight of Crypto Activities
   The Brazilian Central Bank and the Federal Revenue Service oversee CASPs, ensuring compliance with legal requirements and fostering a safe, transparent market.

Partner with Scorechain for Seamless Compliance

Navigating Brazil’s crypto regulations can be challenging, but Scorechain is here to simplify the process. Our innovative solutions help CASPs effortlessly meet AML, CTF, and Travel Rule requirements.

🔎 Advanced transaction monitoring to reduce risks.
📊 Tailored compliance tools for your operations.
🤝 Support for regulatory reporting to BCB and RFB.
🔗 Integrated Travel Rule solutions for secure and efficient data sharing.

Ready to simplify compliance?
Let Scorechain empower your business to thrive in Brazil’s dynamic crypto landscape. Contact us today to schedule a consultation or demo!

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