Key facts:
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The analyst Thiago Barbosa believes that the law brings more legal certainty to combat fraud.
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“This idea of bringing more security is a façade idea,” says Professor Fabricio Azevedo.
The Law that regulates the use of bitcoin (BTC) and other cryptocurrencies in Brazil comes into force this Tuesday, June 20. And with this, a great expectation has settled on the sector that expects clear rules to operate in this ecosystem.
However, the players in the sector have opposing positions on the contribution that regulation makes to improve safety of bitcoin and other cryptocurrency users operating in Brazil.
On the one hand, there are the members of the community who view with concern the fact that the State is in charge of supervising the ecosystem; while, on the other, there are those who believe that vigilance is necessary to avoid cryptocurrency scams.
Fraud with digital assets is one of the issues of greatest concern in the country. So much so, that the Parliamentary Investigation Commission (CPI) was installed with the objective of follow up on crimes committed with cryptoactives.
To have an idea, scams with cryptocurrencies have generated the approximate loss of 40,000 million Brazilian reais (USD 8,300 million) to 4 million inhabitants of Brazil in the last 5 years, according to data collected by InfoMoney.
And now that the law has entered into force, the debate on how much or how little the regulation will impact the security of the ecosystem.
Some, like the lawyer specialized in cryptocurrencies Thiago Barbosa, believe that the Cryptocurrency law strengthens the market because it will bring legal certainty. In fact, he points out that is designed to protect users of bitcoin and other crypto assets, focusing primarily on traders rather than investors, as commented by Barbossa.
He adds that, with the Central Bank as the main regulator, companies in the cryptocurrency industry will now be able to operate in Brazil under clear rules and specific guidelines. This provides more opportunities for companies. that adhere to and follow the best market practices.
“The regulation arises with the intention of bringing institutional investors and the general public closer so that the latter has more real guarantee when operating in exchanges, brokers and other market players. That everyone have clearer rules to follow and that the general public come to this sector that in Brazil has already registered the record of 200,000 million operations declared in one month”.
Thiago Barbosa, lawyer specializing in cryptocurrencies.
Bitcoin crimes are now criminalized in the Penal Code
One of the changes introduced by the Brazilian Cryptocurrency Law is that it includes in the Criminal Code crimes and fraud committed by individuals and companies that operate in the digital asset market.
In its article 10 the Law that regulates the use of bitcoin and other cryptocurrencies in Brazil inserts fraud involving the use of digital assets in article 171 of the Penal Codewhich typifies theft, and provides for a sentence of four to eight years in prison, in addition to a fine for those who commit these crimes.
On the other hand, article 12 establishes that the penalty for the crime of money laundering will be increased by one third if they are committed using digital assets.
It also points out that the identification of clients and the maintenance of records of all transactions carried out will be required, subject to the Financial Activities Control Council, the Brazilian financial intelligence unit, which applies the recommendations of the FATF (International Financial Action Task Force). for the prevention of money laundering.
“We can separate the wheat from the chaff”
The professor at the Pontifical Catholic University of Rio Grande do Sul (PUCRS) Business School, Gustavo Inácio de Moraes, says the regulation of bitcoin and other cryptocurrencies will allow “the market to begin to be disciplined.”
Moraes believes that the Central Bank as the main regulator will be able to “monitor the ecosystem in a more efficient way”.
He adds that cryptocurrencies, being a relatively new market, end up being conducive to promises of sudden and easy profits. That is why he believes it is essential that the BC “separate the wheat from the chaff”, that is, certify who are the best service providers “, as commented for the DW medium.
“At first, this should encourage more investments in virtual assets, since it is monitored by the Central Bank and has greater legal certainty.”
Gustavo Inácio de Moraes, university professor from Brazil.
Transaction tracking does not add security
However, not everyone agrees that transaction tracking is a measure that provides more security for the ecosystem. And so says Fabrício Azevedo, professor of Finance at the University of Vila Vieja (UVV).
He believes that the idea of offering greater security due to the transaction tracking “is nothing more than a facade.” Especially because of government surveillance and control that is contrary to the principles defended by bitcoin followers.
“All of this interferes a bit with a financial transaction system that follows the principles of what was the initial idea of bitcoin, which is to have a decentralized currency, that does not follow any rules, any standardization, with respect to governments.”
Fabrício Azevedo, Professor of Finance from Brazil.
As community members debate whether the law will improve user security and curb cryptocurrency scams, keep in mind that the regulations on which the Central Bank works are yet to be known.
Apparently the regulator is studying measures, such as the separation of crypto assets of companies and users for all service operators, which can be an element that adds fuel to the already burning fire of the regulatory debate.
