In December 2022, Law No. 14,478/22 was sanctioned to establish guidelines for the provision of virtual asset services and the regulation of companies that provide these services.
The regulatory framework stipulates that providers of virtual asset services can only operate in Brazil with prior authorization from a federal government agency or entity.
According to Article 3 of the new law, virtual assets are defined as any digital representation of value that can be traded or transferred electronically and used for payments or investment purposes.
Excluded from this category are national and foreign currencies, electronic currencies, instruments that provide access to specific products or services, and representations of assets provided for by law or regulation.
Article 5 of the same law lists activities categorized as the provision of services involving digital assets. Among these activities are the exchange between virtual assets and national or foreign currency, the transfer of virtual assets, and the custody of virtual assets. It is important to note that only institutions authorized by the Central Bank of Brazil may provide virtual asset services, as outlined in Article 8 of Law No. 14,478/22.
The law also establishes guidelines for the provision of virtual asset services, emphasizing free enterprise and competition, consumer protection, operational efficiency, good governance practices, personal data protection, and anti-money laundering measures.
An important modification is the inclusion of a new crime in the Penal Code: fraud involving virtual assets, with penalties ranging from 4 to 8 years of imprisonment and a fine.
Furthermore, the law amends two other laws—the Law No. 7,492, which defines crimes against the national financial system, and Law No. 9,613, which addresses money laundering—to include providers of virtual asset services.
Although published in December 2022, the new regulation only came into effect in June 2023, 180 days after its official publication, providing a grace period for companies in the sector to comply with the new rules.
This new legislation represents a significant step towards the recognition and regulation of virtual assets, protecting consumers, preventing financial crimes, and ensuring the stability of the financial system.