Do you know those airline miles we accumulate through spending on credit cards and loyalty programs? We all know that they are worth money, and similarly, Bitcoin is legal, despite not having specific regulations.
Bitcoin and cryptocurrencies are perfectly legal, even recognized by the IRS, for taxation and declaration terms, and by the Brazilian Justice from the perspective of goods and rights.
This issue is not very different from most countries, including the United States and Europe, where cryptography is defined as digital goods and rights , and it is necessary to register exchanges and intermediaries to operate in the segment.
Regulation of Bitcoin in Brazil
Many assume that the Brazilian cryptocurrency market is not regulated, which is partially true. There is no specific regulation for digital assets , but this does not make their possession or commercialization illegal.
There is no deadline for eventual regulation of the sector , which should define how cryptocurrencies fit into the Central Bank's definition of “payment arrangements”. In addition, the regulatory framework should establish rules for agents acting in intermediation, including exchanges.
The Bill of Law 2.013 / 15 is being processed in the special commission of the Chamber of Deputies, however, at the moment, public hearings are suspended. Bill 3,825 / 2019 and 3,949 / 2019 run in the Federal Senate, which aim to regulate transactions carried out with crypto or digital currencies on electronic trading platforms. Nor is there a deadline for consideration by the Senate plenary.
Normative Instruction No. 1,888
In August 2019, Normative Instruction No. 1,888 of the Federal Revenue became effective. Several obligations were created to declare transactions, affecting exchanges, P2P intermediaries, as well as over-the-counter markets, known as OTC.
These intermediary agents were obliged to declare on a monthly basis all transactions carried out by their customers, such as purchase, sale, exchange and movements of crypto.
For investors who move or transact on exchanges outside the country , or who carry out direct negotiations between individuals, the declaration becomes mandatory when exceeding R $ 30 thousand in the month .
It is important to note that throughout the public consultation carried out by the Revenue, we here in the Bitcoin Market actively participate to make sure that the rules would not make the market unfeasible and, on the contrary, allowed its growth.
Situation of exchanges
In May 2020, IBGE implemented a National Classification of Economic Activities, or CNAE, specific to cryptocurrency activities . According to lawyer José Domingues da Fonseca, partner at Firmo Advogados, in an interview with the portal CriptoFácil:
“... the State is - explicitly - recognizing crypto brokerage activity (which is already lawful under Brazilian law), as well as companies operating in the field may be duly cataloged in government censuses or in bank surveys bank details and etc. ”
These specific activity codes for crypto brokers, known as exchanges, were a significant step towards legitimation, as some banks refused customers and companies in the industry alleging in congruence in the registry's activity code.
ABCripto and self-regulation
ABCripto, Brazilian Association of Cryptoeconomics, aims to unite the main entities active in the country in the area of cryptography and blockchain for dialogue with the public authorities, as well as executing actions in favor of technological development and innovation, defending the user's interest final and community.
The Bitcoin Market is proud to participate actively in ABCripto, which through self-regulation seeks to build active communication with regulators , so that they have a high perception of the new economy, and can delimit the rules in the best possible way.
The Code of Conduct and Self-Regulation is a set of rules that will help in the organization and standardization of the Conduct and Money Laundering Prevention practices among companies in the market .
This set of rules will help to organize the sector's governance, monitor the adoption of good practices by brokers and, mainly, will help to avoid misuse of the market, giving legitimacy to the sector .
The Bitcoin Market is in line with such principles that cherish investor protection, without creating obstacles to free enterprise , in line with what serious and honest exchanges and intermediaries already practice today.
Bitcoin regulation around the world
Germany: law that came into force this year allows banks to carry out intermediation and custody of bitcoin and cryptocurrencies; country recognizes such assets as financial instruments, therefore subject to regulation by BaFin, the Federal Financial Supervisory Authority.
Australia: exchanges are regulated and must register with the government agency AUSTRAC; since 2017 cryptocurrencies are considered non-financial assets, subject to capital gain taxation; there is even a regulatory and tax framework for ICOs.
China: after banning exchanges and ICOs in 2017, the country took a turnaround when a court recognized bitcoin as “virtual property” in mid-2019; transactions between people and owning cryptocurrencies have always been permitted, although they are not considered to be securities.
South Korea: one of the most favorable countries for cryptocurrencies, giving total tax exemption; exchanges are required to register with the Financial Supervision Service (FSS), in addition to following the rules of the Financial Services Commission (FSC) regarding deposits in fiat currency.
Europe: there is no single determination for the bloc, however, possession of cryptocurrencies is considered legal; France and Portugal have declared that transactions that do not involve fiduciary values are exempt from taxes.
United States: it is not considered a financial instrument; however, some exchanges and custodians are authorized and supervised by the main national agencies, the NYC Department of Financial Service - NYSDFS, in addition to the responsible division at the US Treasury - FinCEN.
Japan: neither does it recognize cryptocurrencies as a financial asset, but they consider them to be taxable assets; exchanges are required to register, regulation values self-regulation, with little direct oversight
Is it necessary to declare cryptocurrencies?
Although they are not legally recognized as currencies, they are considered as “Goods and Rights” by the Federal Revenue of Brazil, as well as a property, automobile or financial application. Thus, it is required to declare who owned on December 31 of the previous year more than R $ 5,000 in cryptocurrencies, calculated at the acquisition price .
Regardless of the still undefined regulatory issue, it is necessary to declare capital gains in cryptocurrencies to the Federal Revenue in the Income Tax. It will only pay taxes on capital gains in the months when the total sales exceed R $ 35 thousand, through the carnage-lion .
Don't run away from the lion! If you fail to declare, the IRS will detect any differences. In case of doubt, we have prepared another article with more information on taxation and declaration of crypto assets .
How to buy safely?
One of the central pillars of the Bitcoin Market is our security concern . Our customers rely on tools such as 2-Step Verification (2FA) , secure word and PIN to access their accounts and perform operations.
Check the website address (URL) , the website address, and never click on emails from suspicious addresses or suspicious messages. If you prefer to access the Bitcoin Market through our apps (apps) for iOS and Android , be sure to download (download) only from official stores.
