Brazil Crypto Law Back On Agenda As FTX Meltdown Sends Shockwaves

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Brazil is one of the top 10 active markets globally for crypto.(Representational)

Brazilian crypto advocates are urging lawmakers to give final approval on a bill aimed at boosting oversight of the sector, after the collapse of FTX - once an industry darling - raised fresh concern about unregulated digital currencies.

Roberto Dagnoni, a top executive at SoftBank-backed exchange Mercado Bitcoin, said the law had been "kind of dormant" during the election period but now needed to be a priority.

"If there is a good side (to the FTX disaster), it would be that it gets the law prioritized," he told Reuters on Tuesday. "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, passed earlier this year by the senate and now awaiting lower chamber approval, would force all locally active crypto providers to have a physical entity in the country, and mandatory disclosure of suspected money laundering and other criminal activities. The text outlines fines and even imprisonment for breaches.

Brazil is one of the top 10 active markets globally for crypto, according to 2022 Chainalysis data.

Fernando Furlan, the former president of the country's blockchain association, also said he hoped the FTX saga would be "a push enough" to get the law passed.

Furlan added that while the law may make it harder for so-called 'dot com' crypto exchanges and smaller groups to operate due to higher reporting standards, this was a healthy trade-off.

"If it's good for Brazilian investors, then it's a good law," he added.

The law could be passed sooner than previously expected.

Newspaper Folha de S. Paulo last week cited Lower House Speaker Arthur Lira as saying the