Bill for cryptocurrencies like bitcoin advances. Photo: 3art Rachen.
The Senate Committee on Economic Affairs (CAE) today approved a replacement for three bills that regulate cryptocurrency services, such as bitcoin and ethereum, and establish penalties for fraud cases. In addition, the deputy’s rapporteur, Senator Irajá Abreu (PSD-TO), included mining in the document. The text had the active participation of the Central Bank (BC), the Securities and Exchange Commission (CVM), the Federal Revenue and other institutions and companies, said Abreu.
The substitute recommends the approval of PL 3.825/2019, by Senator Flávio Arns (Podes-PR) and proposes that companies that transact cryptocurrencies will be considered financial institutions. In addition, it considers projects 3,949/2019, by Senator Styvenson Valentim (Podes-RN), and 4,207/2020, by Senator Soraya Thronicke (PSL-MS), which dealt with the same subject, to be harmed, that is, by the shelving. Both also established the Revenue and BC as market regulators.
This is yet another movement to regulate the sector by the Legislature, which is rushing to approve a subject that has been stalled for years in Congress. The rush is now due to the growth of cryptocurrency transactions. According to the Senate, there are 3 million people registered in cryptocurrency exchanges in Brazil, a number that is close to that of the stock exchange.
Last November, Abreu gave a favorable opinion for the three projects in the Senate to continue being processed. Now, if there is no recourse for a vote in plenary, the text may go directly to the Chamber of Deputies, according to the Senate agency.
Chamber also has cryptocurrency bill
The Chamber of Deputies also has a cryptocurrency bill to call its own. Last December, the House approved PL 2303/15 by deputy Aureo Ribeiro (Solidariedade-RJ).
The substitute determines that the Executive branch will indicate which bodies should define the rules and supervise the cryptocurrency segment. However, there have already been discussions between Congress, the BC and the CVM, for example, so that these bodies are responsible for regulation.
So much so that, as reported by Folha de S. Paulo last Sunday (20), the BC is already working on the details of the regulation. What Congress is doing is recognizing the cryptocurrency industry and giving the general guidelines for its functioning. Technical bodies such as the BC must deal with the details of the regulation.
“Regulation is an important step to stimulate the development of the sector and bring security and predictability to all parties involved,” lawyer Bruno Matos Ventura, a partner in the tax area at Bichara Advogados, told Blocknews when commenting on the approval of the substitute.
The concept of virtual assets, or cryptocurrencies, of the proposed law excludes sovereign currencies, such as the digital real that the BC will start testing. In addition, it excludes electronic currencies, which, according to law 12.865/2013, are resources in reais on electronic platforms that allow payments through cards and cell phones. It also excludes what is a security, therefore, it is not regulated by the CVM. But if it involves a public offering to raise funds in the financial market, then the CVM must be involved in the case.
Executive power must define who regulates the sector
Regulatory bodies will authorize the operation of companies operating in the cryptocurrency sector. This is one of the ways to avoid fraudulent companies. As well as authorizing merger, spin-off, sale and rules of management positions of these companies. In addition to defining whether these companies need to act only in cryptocurrencies or if they can also act in other services, such as traditional financial services. Those that already operate in the market must adapt within six months to the rules after the proposal becomes law.
In the case of irregular operation, the penalties are those of law 7.492/1986, known as the white collar crimes law. Thus, the provision of virtual asset services without prior authorization would be included in this law. The prescribed penalty is imprisonment from one to four years and a fine.
Law 13,506/2017 must also apply, which already refers to companies under the supervision of the BC and CVM. The project also submits cryptocurrency exchanges to the money laundering law 9.613/1998. Companies must register all transactions that exceed the limits set by the Financial Activities Control Council (Coaf), which takes care of combating money laundering. The financial crimes law, 7,492/1986, and the Consumer Defense Code, law 8,078/1990 would also apply.
Changes in the Penal Code
The text also inserts in the Penal Code (Decree-Law 2,848, of 1940) fraud in the provision of virtual asset services, typified as “organizing, managing, offering portfolios or intermediating operations involving virtual assets, in order to obtain an unlawful advantage, to the detriment of others, inducing or keeping someone in error, through artifice, ruse , or any other fraudulent means”. The penalty is imprisonment from four to eight years.
The substitute provides for exemption from PIS, Cofins Import, IPI Import and Import Tax (II) by legal entities until the end of 2029. This includes the purchase of machines and software for processing, mining and preservation of virtual assets. According to the Senate agency, this point was proposed by Senator Luis Carlos Heinze (PP-RS). and welcomed by the rapporteur, Senator Irajá.