Brazil Introduces New Requirements for Crypto

Brazil is tightening its cryptocurrency regulations. The country's Central Bank has introduced a new requirement for Virtual Asset Service Providers (VASPs) that wish to operate legally in the Brazilian market.

Under Normative Instruction No. 739, companies applying for a license must submit an independent audit conducted by an entity registered with Brazil’s Securities and Exchange Commission (CVM). Only after meeting this requirement will they be eligible to obtain an operating license.

The audit must confirm that the company complies with applicable regulations and has adequate security and compliance procedures in place. The assessment will cover areas such as internal policies, organizational structure, employee training programs, risk management practices, and customer identification procedures.

Auditors will also evaluate the effectiveness of measures designed to detect and report suspicious transactions, prevent money laundering and terrorist financing, monitor fraud attempts, and enforce administrative asset freezes when required.

According to the Central Bank, the new rules are intended to strengthen the licensing process and align Brazil’s regulatory framework with international standards for combating financial crime. The institution also emphasized that independent audits improve transparency and enhance the credibility of control mechanisms used by cryptocurrency businesses.

The regulatory crackdown follows Operation Hidden Flow, an investigation involving six fintech companies that allegedly transferred more than $5 billion through irregular transactions. Authorities also uncovered evidence suggesting that digital assets had been used for money laundering activities.

Investigators suspect that some of these operations may have been linked to Primeiro Comando da Capital (PCC), one of Brazil’s most powerful criminal organizations, which is known for its involvement in drug trafficking.