Brazil's lower house approves bill to regulate crypto sector

The bill was approved by Brazil's lower house of Congress on Tuesday, which aims to boost oversight of the country's sector after one of the world's largest exchanges collapsed earlier this month.

The proposal, which would have the sector regulated by a government-appointed federal agency, will now go to outgoing President Jair Bolsonaro for approval.

The new rules would apply to legal entities that exchange virtual currency for local or foreign currency, exchange virtual assets, conduct transfers or are involved in financial services related to issuers or vendors of virtual assets.

The bill would force all local criptocurrencies providers to have a physical entity in the country, with fines and even prison sentences for those who breached the new rules, according to local media.

According to media, the bill would give companies a grace period for compliance.

The collapse of the Bahamas-based FTX prompted investigations by Bahamian and U.S. authorities.

Before the crunch, 30-year-old founder Sam Bankman- Fried secretly moved $10 billion of customer funds to his proprietary trading firm, according to a person familiar with the matter, according to two people familiar with the matter.

Brazilians support the bill, saying it was important to establish rules in the industry. According to the data from 2022 Chainalysis, the country is one of the top 10 active markets for cryptocurrencies in the world.