It is well known at this point that a single piece of legislation within a country can either lead to the growth of a particular industry or cripple it all together. Few industries are aware of this as the crypto industry as regulations put in places such as China and India have basically stifled the industry in those parts of the world and there is the constant push for pro-crypto regulation in order to keep the industry afloat. Ask crypto becomes more popular, new regulations are being created around the world to manage it and while some have been beneficial, others have not.
It has been reported that strict regulations for the crypto industry in Brazil have led to the closure of a number of exchanges.
The reason for the strict regulations were the allegations of fraud going on in Atlas Quantum, Zero10, and Trader Group last year. In response to this, Brazilian authorities were determined to better police cryptocurrency as an industry and put more stringent laws in place. Due to the fear of heavy fines and the threat of closure, two prominent crypto exchanges in Brazil have seen shut down.
One of the exchanges that were forced to close down was called Access Bitcoins and they voluntarily closed their doors recently.
“After the Federal Revenue Service introduced these rules we noticed a significant decrease in the traded volume. We also feel that the market has cooled off for smaller exchanges,” said Cofounder Pedro Nunes.
Another exchange that is feeling the heat of these regulations is called Latoex and they are being threatened with a 100,000 Brazilian Real fine if they did not comply with orders by the Brazilian Securities and Exchange Commission. In response to this, they also have been forced to close up shop. A lot of these issues boil down to the fact that Brazil does not have dedicated crypto laws in place yet and as such, crypto funds fall under the Normative Instruction No. 1888 issued by the Department of Federal Revenue. This means that they have to report all transactions or face hefty fines and clearly, this has gone on to affect the industry.