Welcome to Latam Insights Encore, a deep dive into Latin America’s most relevant economic and cryptocurrency news from last week. In this edition, we discuss how Brazil is becoming an example of how states should enforce crypto compliance by battling tax evasion and pursuing money laundering groups instead of targeting crypto innovators.
Latam Insights Encore: Brazil Shows How States Should Keep an Eye on Crypto Usage for Nefarious Purposes
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Latam Insights Encore: Brazil Is Becoming a Model For Crypto Enforcement
While crypto gives users many advantages, it also puts power in their hands to perform illicit activities due to its traits. Brazil is becoming a hotbed for crypto adoption, including also the use of crypto in ways opposite to national laws.
Nonetheless, the Brazilian state has stepped up using different tools and the power of its institutions to force compliance, even using AI tools to enforce compliance in crypto criminal cases. Two instances arose this week: the first one involved several seizure orders in an operation that tackled three groups using crypto to launder money coming from drug trafficking and smuggling and sending it abroad to other countries. The groups had already laundered over $9 billion since 2021.
Another instance is leveraging an artificial intelligence (AI) tool by the Federal Revenue Service, the Brazilian equivalent of the Internal Revenue Service (IRS), to detect illicit transactions involving crypto tax fraud and money laundering. The tool, an in-house development of the institution, has already served to identify $180 million in this kind of activity in two different cases.
With these actions, Brazil shows that it is not only one of the more innovative jurisdictions for crypto, having already enacted several laws regarding its use, with an ongoing CBDC pilot, but that it also has institutions that can step up to the plate when it comes to investigate and research the usages of crypto for crimes.
While other nation-states clash with crypto creators and innovators on the classification of tokens and incarcerate developers who have created privacy tools, Brazilian authorities have decided to face the real criminals instead, setting an example for others to follow.
What do you think about Brazil’s role in combatting crypto crimes? Tell us in the comments section below.
