Brazil awaits approval of new Crypto bill

By Al Mayadeen English
Source: Agencies
19 Nov 2022 15:01

The bankruptcy of FTX has sparked concerns regarding the unregulated digital cryptocurrencies, and Brazil awaits a bill to strengthen these regulations.

Brazil pushes for new bill after FTX

After the collapse of FTX, new concerns about unregulated digital cryptocurrencies were raised, and Brazilian cryptocurrency proponents pleaded with lawmakers to approve a bill intended to strengthen regulations throughout the sector.

The law had been "kind of dormant" throughout the Brazil elections season, according to Roberto Dagnoni, a senior executive at SoftBank-backed exchange Mercado Bitcoin, but it now needs to be prioritized.

On Tuesday, Dagnoni told Reuters "If there is a good side (to the FTX disaster), it would be that it gets the law prioritized," adding "The rules that currently exist have not been applicable to some players, so they can do whatever you want ... This (law) would change a lot."

The bill, which was approved by the senate earlier this year and is now awaiting action by the lower chamber, would require all locally-active cryptocurrency providers to have a physical presence in the nation and require the disclosure of any suspicions of money laundering and other criminal activity. The passage describes penalties and possibly jail time for any violation.

The passage outlines penalties and possibly jail time for any violation.

According to data from 2022 Chainalysis, Brazil is one of the top 10 most active markets worldwide for cryptocurrencies.

The previous leader of the nation's blockchain organization, Fernando Furlan, expressed hope that the FTX scandal would be "a push enough" to approve the law.

It's possible that the measure will be passed sooner than anticipated after Lower House Speaker Arthur Lira was quoted by the newspaper Folha de So Paulo as indicating last week that the house was prepared to vote on the law before the end of the year.

In a public panel, according to Reuters, the head of Brazil's securities regulator said that "it is important that we start to have rules" for crypto and that the bill "is very close."

However, given the 2023 budget issues that have gained precedence since Luiz Inacio Lula da Silva's presidential victory, numerous significant individuals doubt the law would be passed so swiftly.

Crypto exchange company FTX filed for bankruptcy

Cryptocurrency exchange FTX has filed for bankruptcy in the US, seeking court protection as it seeks a way to return money to users.

The company's CEO, Sam Bankman-Fried, resigned as the chief executive, according to the company. Bankman-Fried, before the company's downfall, was in charge of the world's second-largest crypto exchange.

In a week, the FTX empire collapsed, shaking confidence in the crypto market.

"I'm really sorry, again, that we ended up here. Hopefully, things can find a way to recover," said Bankman-Fried, nicknamed the 'King of Crypto', wrote on Twitter on Friday. "I was shocked to see things unravel the way they did."

Bankman-Fried was one of the stars in the crypto field, drawing comparisons to investment magnate Warren Buffett. On Monday, his net worth was over $15 billion.

The company can continue to operate if filed for bankruptcy, while also restructuring its debts under court supervision.

"The FTX Group has valuable assets that can only be effectively administered in an organized, joint process," said John J Ray III, the new CEO who has experience with high-profile bankruptcy cases.

Bankman-Fried was a major donor for the Democrats.