Brazil seeks to curb tax fraud, publishes new rules for cryptocurrency exchanges

The Department of Federal Revenue of Brazil (RFB) on Wednesday published new rules for cryptocurrency exchanges, Cointelegraph reported.

The new rules are primarily aimed at identifying tax fraud and would require cryptocurrency exchanges to inform the regulator about cryptocurrency transactions of users. According to the official announcement (via online translation):

“Normative Instruction RFB 1,888 / 2019 [requires] that as of September of this year … individuals and legal entities and exchanges that carry out operations with cryptoassets will have to inform the IRS.”

Published last month, Normative Instruction 1.888/2019 requires domestic cryptocurrency exchanges to provide information about all transactions conducted within their system, while cryptocurrency exchanges based abroad would be required to provide information "whenever the monthly value of the operations, alone or jointly, exceed 30,000.00 Brazilian reals [$7,750]."

In addition to transaction volume, exchange operators are also required to disclose details such as the “nationality of the digital currency holder, their residence or domicile, registration number and the crypto assets used in a transaction,” Cointelegraph added.

Earlier this month, Rodrigo Maia, the President of the Chamber of Chamber of Deputies of Brazil, ordered to set up a special commission to deliver an opinion on a bill that aims to regulate cryptocurrencies in the country.

The country is also making efforts to up its game in the area of blockchain technology. A new bill has been proposed that seeks to encourage implementation of blockchain and other advanced technologies in all local public administration units. In addition, the country’s government and financial regulators are reportedly developing a regulatory sandbox type model targeting new technologies including blockchain.