BRAZIL Law and Practice Contributed by: Octaviano Duarte, Henrique Forssell and Marcelo Lucidi, Duarte Forssell Advogados
(referred to as “virtual assets” in the law) and regulates significant aspects of this market. According to Law 14,478, a virtual asset is defined as a digital represen - tation of value that can be traded or transferred by electronic means and used to make payments or for investment purposes. This explicit definition establish - es cryptocurrencies as property under Brazilian law. The law also introduces important regulations regarding the operations of crypto-asset exchanges. Exchanges now require authorisation from a special - ised federal body to operate. Additionally, certain corporate transactions, such as transfers of control, mergers and demergers of exchanges, must receive prior approval. Furthermore, the law defines the crime of “fraud using virtual assets, securities, or financial assets”, which carries a potential prison sentence of up to eight years. In cases involving fraud and where there is a risk of asset dissipation, parties can seek precautionary measures from civil and corporate courts to compel exchanges to provide information on suspicious trans - actions (such as wallet identification numbers, holder and beneficiary information, transaction hashes, etc). Freezing orders can also be requested, which, once granted, are binding on exchanges based in Brazil, obliging them to enforce the order.
A particular challenge related to crypto-assets con - cerns the implementation of freezing orders. As Law No 14,478 has been in effect for a short time, not all Brazilian exchanges obtained proper authorisation to operate. Moreover, fraudulent transfers often involve wallets located in other jurisdictions, and many trans - actions are conducted through clandestine exchanges or by individuals maintaining anonymity. To address this challenge, co-operation with the Public Prose - cutor’s Office and foreign judicial and governmental authorities is crucial. In 2024, the National Justice Council signed the Tech - nical Cooperation Agreement No 133/2024 with the Brazilian Association of Cryptoassets and Blockchain (ABCripto), aimed at integrating the cryptocurrency market with the judiciary. One of the objectives is to facilitate the processing of orders between the judici - ary and exchanges to expedite the seizure of bitcoin and other cryptocurrencies held by exchanges in Bra - zil. This agreement is a significant step towards the implementation of CriptoJud, a tool similar to SISBA - JUD, which will enable judicial authorities to search for, identify and seize crypto-assets held in wallets belonging to debtors or defendants involved in legal proceedings.
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