The Brazilian cryptocurrency exchanges Acesso Bitcoin and Latoex announced their closure due to new tax rules that became effective even before official legislative approval.
Thus, digital asset exchanges which do not comply with the new reporting requirements are fined. Moreover, strict rules damage smaller platforms resulting in its closure due to declining trading volumes. One of the affected exchanges, Acesso Bitcoin, said the current situation created by the new rules was the main reason for its decision to stop operations.
“After the Federal Tax Service introduced these rules, we noticed a significant decrease in trading volume,” said Pedro Nunes, co-founder of the exchange.
Acesso Bitcoin recently began advising clients on how to proceed with a withdrawal. Any users storing BTC on the exchange must transfer the coins to a private wallet or to another exchange. Customers with balances in Brazilian reals can withdraw money at any time in accordance with the terms and conditions that apply to the normal operation of the platform.
The Brazilian Latoex exchange is also closing due to difficulties associated with the new requirements of the country’s tax authority. Last week, the closure was confirmed by Diego Velasques, CEO of Latoex Capital, the investment division of the exchange.
Latoex plans to sell its assets to other companies and return the remaining funds to customers. The asset manager is also trying to reverse the suspension order issued by the Brazilian Securities and Exchange Commission. The regulator threatened a group of companies to impose a fine of 100,000 Brazilian reals ($ 23,000) in case of non-enforcement of the decision.
Brazilian Cryptocurrency Bills
Brazil has yet to formally enact laws designed to regulate the cryptocurrency industry. In the absence of specific legislation, industry interactions are currently largely regulated by Regulatory Instruction 1888, issued by the Department of Federal Revenue of Brazil (RFB).
According to this instruction, information on all transactions carried out through Brazilian cryptocurrency exchanges must be transmitted to the RFB. Brokers and companies that provide inaccurate information are fined about $ 350. But even without fines, compliance with standards requires additional investment, as the entire sector is trying to adapt to the new rules. In addition, last August, the Brazilian Tax Service ordered citizens to report cryptocurrency transactions.