The new self-regulation seeks to legitimize the use of cryptocurrencies in Brazil. Exchanges such as Ripio, Foxbit, and Bitcoin Market signed the document.
In recent days, the Brazilian Cryptoeconomy Association ABCripto signed a code of self-regulation of the cryptocurrency market. The document seeks to legitimize and ensure the use of crypto assets in Brazil.
The most emblematic companies in the market decided to sign this agreement to be able to trade around USD 100 billion worth of cryptocurrencies by the end of 2020. In this way, firms specialized in the custody, brokerage, and exchange of crypto assets must now incorporate measures to prevent crimes and money laundering on their platforms.
Among the most prominent companies that signed this self-regulatory code are the exchanges Foxbit, Ripio, Bitcoin Market, and NovaDAX. These exchange platforms collectively mobilize up to 80% of the volume of cryptocurrency transactions in Brazil. For that reason, the ABCripto entity considers this agreement a milestone in the Brazilian crypto-asset ecosystem.
The signing of the agreement happened recently on a live broadcast. At the same time, it was registered on a private blockchain-based platform that GrowthTech created. This company develops distributed ledger solutions for the notary and real estate market, relying on IBM cloud services. The idea was to establish a series of operational practices and compliance standards among the constituent members of this market.
The CEO of ABCripto, Safiri Felix, noted that the cryptocurrency trading market has increased by 2 digits per year in Brazil in the last three years. However, this ecosystem continues to face the regulatory vacuum, since the nation’s congress is still discussing four possible bills for cryptocurrencies.
Legitimize and Demystify Cryptocurrencies in Brazil
The main goal of this self-regulation is to protect users “without hindering the free initiative” of companies, according to Felix. In this sense, the document seeks to incorporate practices that legitimize and promote the trading of crypto assets, while demystifying the use of these currencies for scams or extortion.
For that reason, they have decided that all platforms will have to comply with the basic know-your-customer requirements. Likewise, they must increase their security parameters, strengthen their legal infrastructure, commit to respect free competition, and always respect the privacy of their users’ information.
The entity will punish all members who fail to comply with these regulations. The document will incorporate a series of warnings, fines, and even expulsion that the penalized companies will have to face.
Although they consider that the Brazilian government will issue a regulatory framework for cryptocurrency companies, Felix clarifies that this could take a long time. For more than a year, they have been investigating cases of self-regulation at the international level to adapt it to the Brazilian ecosystem.
The director also emphasizes that they decided to accelerate this process due to the coronavirus pandemic. This health phenomenon has triggered the use of financial technologies worldwide, highlighting among them those based on Bitcoin. Faced with this eventuality, Safiri Felix stated that this could be the right time for the more than 30 Brazilian crypto exchanges to adopt protection measures for their users.
By Alexander Salazar
