Cryptocurrency service providers find themselves in an awkward position. The absence of clear regulations in most countries can pose big problems. In Brazil, domestic crypto trading platforms are being asked to fill in a questionnaire. It is another effort to curb money laundering with Bitcoin and other cryptocurrencies.
Brazil Government Probes Exchanges
The communication between Brazil’s government and cryptocurrency exchanges appears to be rather cordial. Instead of investigating companies directly, a questionnaire has been sent out. With this list of questions, government officials in Brazil seek to gain valuable insights on how exchanges operate. More specifically, they want to see if enough measures are being taken to prevent money laundering efforts.
Similar to most South American countries, Brazil has no official cryptocurrency regulation. There has been little effort by the government to prevent this type of activity from taking place. With this new questionnaire, it is likely nothing will change in this regard. Even so, cryptocurrencies can disrupt the domestic financial system. Ensuring everything is done according to rules and best practices is an important step. This measure also brings more legitimacy to the domestic cryptocurrency industry.
Addressing money laundering concerns is never easy. Especially when it comes to cryptocurrencies, as this technology is very different from traditional services. However, cryptocurrency exchanges can feel that such a questionnaire is invasive. In addition, at least one exchange noted that the questionnaire was sent through their contact submission page and is not considered an official government document. Here are some questions being asked:
What are the limits * offered to customers in relation to declared income? (* cash deposit limits in cash and Crypto-coins). Does Crypto-Exchange make any checks on the number of operations or amounts to prevent the customer from exceeding the limits related to their income?
Does the Crypto-Exchange trade popular crypto-coins for their anonymity, such as Monero, Dash and Zcash?
How many accounts (legal entity and individual able to deposit, make transfers and withdrawals) about Crypto-Exchange have in their registers?
An Unruly Ecosystem Remains
Cryptocurrency is gaining traction on a global scale. Brazil is no exception in this regard. This is despite one of its larger exchanges suffering a major data breach not long ago.
In Japan, the Coincheck hack served as a wakeup call to the government, who have scrutinized cryptocurrency exchanges even more closely since then. As for the government of Brazil, their exact plans on possibly regulating exchanges (or not) is unclear.
The cryptocurrency industry continues to grow and evolve as a whole. For the most part, policymakers seem to be approaching this industry with an open mind in 2018. It seems that Brazil currently has no plans to impede cryptocurrency trading at this time. It does behoove exchanges to work with regulators to ensure best practices at all times. Such action will benefit consumers and exchanges alike over the long run.
What do you think about this questionnaire? Let us know in the comments below.
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