Brazil summons the most prominent cryptocurrency exchanges to provide clarification on their services

Brazil’s tax authority is requesting that major foreign crypto exchanges, including Binance, Coinbase, OKX, and KuCoin, provide an explanation of their operational and tax collaboration practices in the country.

Brazil is positioning itself as a major player in the global cryptocurrency industry, and it is now addressing the likes of Binance, Coinbase, OKX, and KuCoin. The purpose of these exchanges is to obtain information regarding the manner in which they manage operations and collaborate with local service providers, particularly in the context of tax matters.

In contrast to local exchanges, they have not been required to disclose their activities in accordance with Brazilian regulations. The commotion commenced when Brazil’s tax authority designated this as an essential matter. Andrea Chaves, the deputy secretary of inspection at the Federal Revenue Service of Brazil, observed:

“It is imperative that we initially comprehend the manner in which they operate in this location, regardless of whether there is any unlawful activity. We are also apprehensive about the possibility of Brazilian wealth being subject to taxation in this country.”

Wagner Lima, the risk management coordinator for the revenue service, echoed this sentiment. According to her, the government is interested in comprehending the manner in which these foreign entities are conforming to the regulations established in 2019.

The scrutiny is not an unexpected development. The crypto market in Brazil has experienced a significant increase. Brazilians transacted a staggering $24.6 billion in cryptocurrency from January to July 2023, a 36.6% increase from the previous year’s figures during the same period. Notably, foreign exchanges accounted for $2.6 billion of this total, a 51.2% increase from 2022.

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