|Nov 03, 2018 05:44 PM||By: Ben Noble | 1694 Views|
Brazil’s Department of Federal Revenue (RFB) has newly announced it’s scanning to monitor the activities of businesses dealing with cryptocurrency, a move it insists will help it counter tax evasion and money laundering.
According to local news outlet G1, the RFB issued a documentthat reveals Brazil-based cryptocurrency exchanges now have to submit complete monthly articles on all of their cryptocurrency-related operations.
Both businesses and individuals accepting cryptocurrency assets in the country will reportedly have to report crypto-related transactions that pass 10,000 Brazilian reals ($2,700) through the organization’s virtual service center (e-CAC). Those who fail to do so will allow fines, which can vary depending on whether the statements were delayed, wrong, or false.
The RFB requires that, in December of last year, Brazil saw over 4 billion reals ($1 billion) used to buy and sell cryptocurrencies. This year, given the crypto industry’s growth in the country, the annual trading volume between 18 and 45 billion reals is expected ($4.8 to $12.1 billion).
The RFB added:
“In Brazil, there has been a notable increase in the cryptoasset market in recent years, which demonstrates the importance of the cryptoasset market in the country, largely for the tax administration, since transactions are subjected to income tax on the capital gains ultimately earned.”
The number of cryptocurrency exchange users in the country, the company added, is now more significant than that of B3 — the country’s stock exchange based in São Paulo. As stated, the country’s most famous investment firm, XP Investimentos, has launched a cryptocurrency exchange called XDEX. Leading crypto exchange Huobi has grown its operations to Brazil.
According to the country’s tax regulator, many news outlets have been publishing on the use of cryptocurrencies to evade taxes, launder money, and corrupt officials everywhere the world. As such, it argues, regulators need to step in. Its note states:
“The research of certain agents for anonymity, which is one of the main attractions for the use of several cryptoassets, must always be combated, even by the tax authority, to raise the risk of criminal practice.”
The regulator tells examples from other countries. It points out that in Australia, businesses dealing with cryptocurrencies have to go within checks to combat money laundering and terrorism financing. As stated, Australia’s Post launched a ‘Digital iD’ service crypto buyers can practice.
Per the RFB, the European Commission has recognized limiting cryptocurrency transactions and performing other measures to stop crypto users from evading taxes. In Brazil, crypto exchanges have prominently been under scrutiny as earlier this year the government sent them a 14-point questionnaire to learn more about them, and their potential to be used to launder money. Brazil’s antitrust watchdog, CADE, has sent them a different survey, which they have to answer or face a fine that could go up to $25,000.
When, Bitcoin Max, a local exchange, has recently won a standoff against two banks, which reopened its accounts to avoid fines. Curiously, property funds in the country have recently been given the green light to invest in cryptocurrencies like bitcoin, although not immediately.