Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: Brazil bans the use of cryptocurrency for gambling-related payments, and Worldcoin faces fines for alleged abusive behavior in Buenos Aires.
Latam Insights: Brazil Bans Crypto for Gambling, Worldcoin Battles Buenos Aires
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Brazil Passes Rules Banning Cryptocurrency Payments for Gambling
Brazil has legalized the use of cryptocurrency and other payment methods for gambling purposes. The Ministry of Finance and the Prizes and Betting Secretariat (SPA) published rules establishing that electronic transactions are the only payment methods operators might accept for betting activities in the country.
The transactions might be completed using Pix (a popular interbank system), standard electronic transactions, and debit and prepaid cards. However, cash, bank slips, checks, virtual assets cryptocurrencies, and credit cards are banned from being used to complete bets. Also, the rules determine that these transactions must be made directly between the bettor and the operator, without middlemen involved.
These determinations are part of a revamp of the regulatory system in Brazil regarding gambling that has been in the works since 2022. This included the approval of the gambling bill and its signature by President Luis Inacio “Lula” Da Silva in January.
Worldcoin Faces Fines Over $1 Million in Fines in Buenos Aires
Worldcoin, the biometric identification project, is facing legal action due to its operations in the province of Buenos Aires. The company was accused of including unfair clauses in its binding contracts, violating the rights guaranteed by the National Consumer Defense Law. The consumer defense organization of Buenos Aires also found contradictions in the treatment of the biometric data collected from citizens of the province.
The government of Buenos Aires found that several contracts that users accept when using Worldcoin’s services, including “Terms and Conditions of Use”, “Privacy Notice” and “Data Consent Form,” vulnerate the rights of Argentine consumers. Among these clauses considered unfair, one gives the company the ability to suspend the service with no refunds to its users.
These contracts force users to renounce collective claims and establish the Cayman Islands regulation as applicable to Argentines. In addition, eventual disputes would be settled through arbitration in California’s jurisdiction, infringing on Argentine law. Worlcoin faces fines of over $1 million for these alleged infringements.
Worldcoin Rejects Buenos Aires’ Allegations on Contract Illegalities
Worldcoin is fighting back against the accusations of alleged wrongdoing Buenos Aires presented this week. The province affirms that Worldcoin violates customer protection regulations by forcing users to approve “abusive” contract clauses. These clauses called out by province officials include determinations that force citizens to solve eventual disputes in international jurisdictions, violating the rights of consumers.
In addition, officials also found contradictions linked to the treatment of users’ biometric data and the inclusion of minors in Worldcoin’s iris scanning operations.
Local sources reported that Worldcoin rejected these allegations, explaining that the project prioritizes “the opportunity to interact with government agencies, regulators and third parties to answer any questions they may have.” In addition, Worldcoin stated that it answered all the inquiries made by the province authorities since January and that the allegations against it still have to be substantiated.
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