Senate Committee Approves Cryptocurrency Market Rules

The Economic Affairs Commission (CAE) approved this Tuesday (22) a project that recognizes and regulates the cryptocurrency market in Brazil. If there is no recourse for a vote in plenary, the text may go directly to the Chamber of Deputies.

Digital currencies use cryptographic systems to carry out transactions. Unlike sovereign money — issued by governments, such as the real or the dollar — cryptocurrencies are launched by private agents and traded exclusively on the internet. The holder of a virtual currency can only redeem it using a code provided by the seller.

what does the text say

The collegiate accepted the replacement of Senator Irajá (PSD-TO) to three matters presented by Senators Flávio Arns (Pode-PR), Soraya Thronicke (PSL-MS) and Styvenson Valentim (Pode-RN).

Irajá understands that the crypto asset is not a security. Therefore, it is not subject to inspection by the CVM, which oversees the stock market. The exception is in the case of a public offering of crypto-assets to raise funds in the financial market.

The rapporteur considers as a provider of virtual asset services the company that performs, on behalf of third parties, at least one of the services:

• Cryptocurrency redemption (exchange for sovereign currency)
• exchange between one or more cryptocurrencies;
• transfer of virtual assets;
• custody or administration of these assets or instruments for controlling virtual assets;
• participation in financial services related to the offering by an issuer or the sale of virtual assets

Regulation

The proposals by Soraya Thronicke and Flávio Arns established the Federal Revenue and the Central Bank as regulators of the virtual currency market. The rapporteur assigns to the Executive Branch the responsibility to define which bodies should regulate and supervise cryptocurrency business.

The Irajá substitute also sets some guidelines: the regulation of the cryptocurrency market must promote free enterprise and competition; enforce control and separation of customer resources; define good governance and risk management practices; ensure information security and protection of personal data; protect and defend consumers and users and popular savings; and ensure the soundness and efficiency of operations.

According to the text, the Executive Branch must create rules in line with international standards to prevent money laundering and concealment of assets, as well as combat the activities of criminal organizations, the financing of terrorism and the production and trade of weapons of destruction. in large scale. According to the text, it is up to the bodies appointed by the Executive Power to authorize the operation of brokerage firms and define which assets will be regulated.

The text admits the possibility of a simplified procedure for obtaining the operating license. The body may authorize the provision of other services directly or indirectly related to the exchange’s activity.

The regulator appointed by the Executive Branch may authorize the transfer of control, merger, spin-off and incorporation of the brokerage firm; establish conditions for the exercise of management positions; and authorize the possession and exercise of persons in these positions.

According to PL 3,825/2019, the body is free to decide whether companies will have to operate exclusively in the virtual assets market or not. The hypotheses for including transactions in the foreign exchange market and the need to submit them to the regulation of Brazilian capital abroad and foreign capital in the country also need to be defined by the regulator.

According to the substitute, the irregular operation subjects the brokerage house and its owners to all the penalties provided for in the white collar crimes law (Law 7,492, of 1986). The regulator must define conditions and deadlines for the registration of existing brokerages, and they must adapt within six months after the proposal becomes law.