Brazil Probes Binance, Coinbase on Local Crypto Ties

The Brazil tax department contacts several of the largest international crypto exchanges to inquire about their operations and partnerships with local crypto service providers.

Binance, Coinbase, OKX, and KuCoin are international crypto exchanges operating in Brazil despite not being domiciled.

On Wednesday, the country’s tax authorities informed Reuters that an ordinance would be published this week, requiring these exchanges to provide operational information.

Andrea Chaves, the deputy secretary of inspection at Brazil’s revenue service, stated that this initiative aims to ascertain whether Brazilians adhere to the country’s new tax regime and how these transactions operate in Brazil.

“It is a matter of concern for us first to comprehend how they operate in this location and whether there is any illegal activity.” We are also apprehensive about the possibility of Brazilian wealth being subject to taxation in this country.

The Brazilian government is also interested in understanding how foreign exchanges like Binance and Coinbase collaborate with local cryptocurrency service providers.

For example, in Brazil, Binance, the world’s largest cryptocurrency exchange, collaborated with payment behemoth Mastercard to introduce the Binance Card last year.

Binance also acknowledged that Brazil is one of its largest markets. At the time, Guilherme Nazar, the General Manager of Binance Brazil, stated that the country is a “very relevant market for Binance” and that the company will continue to invest in new services for local users.

Brazil With Highest Crypto Adoption Rate in LatAm

Brazil is experiencing one of the greatest cryptocurrency adoption rates in Latin America at the time of the move.

According to the latest Brazil Crypto Report from Metaco, a flourishing fintech ecosystem has facilitated crypto adoption. This has increased the number of individuals who have established relationships with financial institutions.

The report also stated that by 2027, Brazil is expected to generate $1.5 billion in digital asset revenues, with one in five Brazilians currently possessing cryptocurrency.

Brazilians declared 133.6 billion reais ($24.6 billion) in crypto assets last year, a 36% increase from 2022, according to data from the country’s revenue service.

Additionally, the Securities and Exchange Commission of Brazil (CVM) and Brazil’s Central Bank are currently engaged in the process of regulating the cryptocurrency market. The regulation is designed to safeguard consumers and combat financial crimes.