Brazil’s Senate approves digital asset regulation bill

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Brazil is one step closer to regulating its digital asset industry after its parliament passed a draft bill that seeks to police the burgeoning sector. 

As CoinGeek previously reported, the bill had been in the works for three years before it made its way to the Brazilian Senate. In February, it was tabled and unanimously passed by the Senate’s Economic Affairs Committee before being sent to the Senate plenary. President Jair Bolsonaro will then receive it for his signature, turning the bill into law, although he has the power to veto it as well.

In a session chaired by Senate President Rodrigo Pacheco, the house passed the bill, although some minor changes were made. 

“I want to congratulate the rapporteur of the project, Senator Irajá, for the approval, here in the Plenary of the Senate, for this important bill,” the Senate president stated, as reported by local outlets.

While discussing the bill, Senate moved that the country’s executive branch would oversee the digital currency industry. It would create new laws for the industry as it deems fit and will even appoint a regulator to police the sector. 

Previously, the bill had indicated that the Securities and Exchange Commission (CVM) would not be the industry regulator, aside from overseeing ICOs. However, senators argued that it’s up to the executive branch to appoint the regulator, be it the CVM or the country’s central bank.

A sticking point for the bill was its punitive measures for Bitcoin crimes. Brazil has seen several high-profile digital asset crimes, including a scam perpetrated by “Bitcoin King” Claudio Oliveira, who allegedly defrauded $300 million from investors, and a more recent pyramid scheme by “Bitcoin Pharaoh” Glaidson Acácio dos Santos, who reportedly embezzled $7 billion.

Brazilian lawmakers differed on the appropriate penalties for such crimes. The bill initially recommended 4-8 years behind bars for Bitcoin crimes such as pyramid schemes and money laundering. 

One senator opined, “The penalties must be proportionate to the amount of value affected by this type of crime. So, whoever committed a crime of US $1 billion causing damage to thousands of people would have a greater penalty than someone who affected less value.”

In the end, the lawmakers settled for 3-6 years in prison for digital asset scammers.

Watch: CoinGeek New York panel, FYI: Better Information Tools for a More Lawful Blockchain Industry