Tax regulations implemented even before dedicated legislation has been adopted have hit Brazilian cryptocurrency exchanges. Digital asset brokers failing to comply with the new reporting requirements face fines and the stricter rules are hurting smaller platforms, which are shutting down due to dwindling trading volumes.
Also read: Tax Agents ‘Confiscate’ Bitcoin From Criminal but Keep the Coins in His Wallet
Exchanges Struggle With Compliance Costs and Diminishing Returns
One of the affected exchanges, Acesso Bitcoin, points to the current situation created by the new regulations as the main reason for its decision to quit. “After the Federal Revenue Service introduced these rules we noticed a significant decrease in the traded volume,” said cofounder Pedro Nunes, quoted by the crypto news outlet Portal do Bitcoin. “We also feel that the market has cooled off for smaller exchanges,” he added.
Porto Alegre-headquartered Acesso Bitcoin recently advised clients on how to proceed with withdrawing their funds. Anyone who keeps bitcoin core (BTC) with the exchange should transfer the coins to a private wallet or another exchange. Customers who have balances in Brazilian real (BRL) can withdraw the money at any time in accordance with the terms and conditions that were applicable when the platform operated normally.
Latoex, formerly known as the São Paulo-based platform E-juno, is another cryptocurrency exchange that’s shutting down due to difficulties meeting the tax authority’s new requirements. Last week, the closure was confirmed by Diego Velasques, chief executive officer of Latoex Capital, the investment arm of the exchange which separated from the crypto trading platform in December.
Latoex (Latin America Token Exchange) is now looking to sell its assets to other companies and return remaining funds to its clients. The asset manager is also trying
