Legal Framework for Crypto Assets: advances and challenges for the financial sector

Crypto assets have increasingly gained prominence as an innovative form of investment and financial transaction. However, the industry faces significant challenges related to the lack of clear and efficient regulation. In Brazil, this landscape began to transform with the approval of the Legal Framework for Crypto Assets (Law No. 14.478).

After a period of stalling and debates, the Legal Framework, sanctioned in 2022 by former president Jair Bolsonaro (PL), will come into force this Tuesday, June 20th. Among its main highlights, the text incorporates punitive measures against fraud into the Penal Code and establishes guidelines for exchanges (cryptocurrency trading platforms).

The Law no. 14.478, sanctioned in December 2022, establishes the guidelines for the operation of crypto actives in Brazil. The legislation aims to promote transparency, security, and development of this emerging market.

Advances provided by the Legal Framework for Crypto Assets

The Legal Framework of Crypto Assets has brought significant advances for the financial sector. This legislation provides a more solid legal basis for investors, establishing clear rules for the operation of exchanges. This not only increases the security of investments, but also encourages the participation of traditional financial institutions and attracts new investors interested in exploring the potential of this growing market.

the Act proactively seeks to combat money laundering and other financial crimes related to crypto assets. For example, the Act requires exchanges to adopt compliance measures, such as identifying users and monitoring suspicious transactions. These measures contribute to market integrity and increase investor confidence, strengthening the industry’s reputation and credibility.

Challenges to be faced

Despite the advances that have been made, there are still challenges to be overcome. One of them is the need to improve the regulation and supervision of the sector. There are still gaps that need to be filled in order to ensure adequate protection for investors and avoid abusive practices. Constant updating of regulations is essential in order to keep up with the rapid and dynamic evolution of the crypto assets market.

See Law 14.478 in full:

Written by Marcos Ferreira and Clara Couto

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