After the collapse of FTX, Brazilians are asking for final approval on a bill aimed at boosting oversight of the sector.
Roberto Dagnoni, a top executive at SoftBank-backed MercadoBitcoin, said the law had been kind of dormant during the election period but needed to be a priority.
If there is a good side to the FTX disaster, it would be that it gets the law prioritized, he told Reuters on Tuesday. The rules that are currently in place have not been applicable to some players, so they can do whatever you want. This law would change a lot. The bill, passed earlier this year by the Senate and now awaiting lower chamber approval, would force all locally active criptocurrencies to have a physical entity in the country, and require disclosure of suspected money laundering and other criminal activities. Fines and even imprisonment are outlined in the text.
According to the data released by Chainalysis, Brazil is one of the top 10 active markets for cryptocurrencies in the world.
Fernando Furlan, the former president of the country's blockchain association, said he hoped that the FTX saga would be a push enough to get the law passed.
Furlan said that the law may make it harder for so-called dot com'' exchanges and smaller groups to operate due to higher reporting standards, but this was a healthy trade-off.
He said that if it's good for Brazilian investors, it's a good law.
The law could be passed sooner than anticipated.
Lower House Speaker Arthur Lira cited by Folha de S. Paulo as saying the chamber was ready to vote on the law before the end of the year.
The president of Brazil's securities regulator said in a public panel that it is important that we start to have rules in criptocurrency, and that the bill is very close. Some key actors are skeptical that the bill will pass quickly given budget issues that have taken priority following Luiz Inacio Lula da Silva's victory in presidential elections.
Lira did not reply immediately to a request for comment.
FTX filed for bankruptcy last week and is facing scrutiny from the U.S. authorities, due to reports that $10 billion in customer assets were shifted from the exchange to FTX founder Sam Bankman- Fried's trading company Alameda Research.
FTX did not have a large presence in Latin America.
Dagnoni told Reuters that Mercado Bitcoins, mainly active in Brazil and Portugal, had no exposure to FTX, having developed its own custody solution to store customer assets.
Despite mass withdrawals, he said that his exchange had even seen net positive volume flows.
He said that people are separating asset and bad management.