Brazil has been very active in the cryptocurrency scene for a long time now. In fact, not only does Brazil rank among the top 5 in the list of countries with the most cryptocurrency holders, but it is also seventh on the list of countries with the highest number of crypto-exchanges.
However, the Brazilian government has lately been constantly revising its cryptocurrency regulations as it intends to implement rules and regulations in response to the increasing interest in cryptocurrencies across the country.
The latest development from the country relates to new tax regulations, with two major Brazilian cryptocurrency exchanges on the verge of shutting down as one of the country’s leading commercial banks has refused to abide by an agreement that would have prevented the closure of cryptocurrency exchange accounts.
The bank in question, ‘Banco Bradesco,’ fears that digital assets might pose serious money laundering risks and it reportedly refused to abide by any demands from the Brazilian Association of Cryptocurrencies and Blockchain [ABCB] regarding account closures for crypto-exchanges. In fact, some sources have revealed that many other commercial banks are planning to shut down accounts belonging to crypto-exchanges.
Digital asset brokers in Brazil are thus willing to give up as they are failing to comply with new reporting requirements under which they face fines, as well as the stricter rules introduced in the EU by the bloc’s Fifth Anti-Money Laundering Directive (AMLD5). In fact, several crypto-startups have already closed down or relocated to other jurisdictions in order to preserve their business models and keep their customer base.
Main reasons for the shutdown
It is noted that exchanges are struggling with compliance costs and diminishing returns. Acesso Bitcoin, one of the affected exchanges, noted that with the current situation created by the new regulations, there is a significant decrease in traded volume. The firm’s Co-founder, Pedro Nunes, had stated that the “market had cooled off for smaller exchanges.”
Latoex is another cryptocurrency exchange that’s shutting down due to difficulties in meeting the tax authority’s new requirements. The closure was confirmed by the company’s chief executive officer last week. The asset manager is now looking to sell its assets to other companies and return the remaining funds to its clients.
Tax regulations around cryptocurrency in Brazil
Right now, there are two bills currently under discussion before the Parliament. The first bill intends to include cryptocurrencies in the definition of “payment schemes” and this is defined as the set of rules and procedures that govern the provision of certain payment services to the public. The inclusion of cryptocurrencies in the definition of payment schemes would make it subject to the regulation and oversight of the country’s central bank.
The second bill aims at defining cryptocurrencies, clarifying that they are not securities, while allowing cryptocurrencies to be freely issued, transferred, and used.
However, both bills are still in their initial phases of discussion. Federal tax authorities have stated that cryptocurrencies must be declared in income tax returns as “other assets.” Furthermore, individuals are obliged to pay income tax on any capital gains obtained with the disposition of cryptocurrencies, provided that the total value of cryptocurrencies is disposed of during any given month exceeding BRL 35,000. Further, tax rates vary from 15% to 22.5% as well.
Crypto Today: Bitcoin troubles still linger underneath $9000
Here’s what you need to know on Thursday
BTC/USD is currently trading at $8911 (+1.50%), the price has stabilized but remains vulnerable underneath $9000.
ETH/USD is currently trading at $235 (+4.20%), a near-term pick up after the recent bout of selling pressure, however, the strong resistance should be noted at $250.
XRP/USD is currently trading at $0.2455 (+5.50%), the bulls will need to break back above $0.2500 to regather decent upside momentum.
Among the 100 most important cryptocurrencies, the best of the day are WAXP $0.045937 (+27.55%), HBAR $0.037804 (+22.49%) KNC $0.534237 (+15.15%) The day’s losers are ABBC $0.0964287 (-4.42%), MOF$0.964287 (-3.30%), WICC $0.226634 (-2.25%).
Chart of the day: BTC/USD daily chart (the price was caught by a secondary ascending trend line of support, preventing the price from free-falling)
Jeff Dorman – the chief investment officer of the crypto firm Arca, commented on Bitcoin being touted as a safe-haven. He said: It’s irresponsible for anyone to say that bitcoin is truly a ‘safe haven.’ Look at how gold and Treasuries and equities react instantaneously to global fears. Bitcoin and digital assets live outside that workflow. Azimo, a London-based online remittance platform has joined forces with Ripple blockchain project, in a bid to leverage the latter’s XRP-powered on-demand liquidity (ODL) solution for faster, cheaper cross-border payments to the Philippines, according to a press release.
On Feb 26, according to the data analytics provider Skew, over $150 million worth of Bitcoin was liquidated on the trading exchange BitMEX, the most seen since the new year began. Millions of dollars of long and short positions caused the value of the cryptocurrency to fall to $8,580, a decrease of more than 6%. Prices in the session, have since recovered the beating seen on Wednesday.
According to a report by Bloomberg, San Francisco-based blockchain project Ripple Inc. Could soon face a lawsuit that, according to the firm, could topple the market for the firm’s digital token, XRP.
Action film star Steven Seagal has been fined for unlawfully touting cryptocurrencies and acting as the brand ambassador for a controversial initial coin offering (ICO), called Bitcoiin2Gen (B2G). The Hollywood star, 66, has agreed to pay a combined $314,000 in fines and penalties, the Securities and Exchange Commission (SEC) said in a statement on Thursday.
Cryptocurrency exchange Binance has partnered with public blockchain protocol Shyft Network as it readies itself to comply with Financial Action Task Force (FATF) regulations. The Shyft Network was designed to provide a decentralized solution for crypto industry players to fulfill global compliance standards, including the FATF’s “travel rule.”
Quote of the day
It’s irresponsible for anyone to say that bitcoin is truly a ‘safe haven.’ Look at how gold and Treasuries and equities react instantaneously to global fears. Bitcoin and digital assets live outside that workflow.
Two Crypto Altcoins Are Up 111% and 95% This Year As Bitcoin, Ethereum and XRP Breakdown Continues
With Bitcoin, XRP, Ethereum and nearly the entire cryptocurrency market in the red, two mid-cap altcoins are bucking the trend.
Analyst Crypto Michaël tells his 49,000 followers on Twitter that he believes traders are starting to become opportunistic by buying the dip in Chainlink (LINK) and Tezos (XTZ). Michaël also believes ETH is starting to show signs of life against BTC.
At time of publishing, Chainlink is up 6.44% in the last 24 hours at $3.62, according to CoinMarketCap. Tezos is up 2.98% at $2.77.
“LINK and XTZ providing an example of the strength of this market. During 2016/2017 several retracements were done, after which a strong bounce occurred. Even ETH/BTC is now showing strength. There’s some opportunities in bull markets to buy the dip, this might be one.”
Chainlink is designed to give companies a seamless way to take data that is external to blockchain applications and place it on-chain. The token is designed to reward operators that power the network. Tezos is a proof-of-stake blockchain platform that allows token holders to earn rewards in return for powering the network.
Michaël is keeping his eye on the big picture and says the largest cyptocurrencies by market cap need to step up and show signs of life. The key, he says, is whether Bitcoin can bounce off of the $8,700 area.
“Markets showing some relief bounces. Majors still need to step in. There’s always the fear of buying dips and people rather buy green candles, they always will. Coming days will decide whether $8,700 becomes the low on $BTC. And that’s still +$1,800 since January 1st.”
BTC is currently at $8,717, down 5.16% in the last 24 hours. Ethereum is down 8.83% at $218.95 and XRP is down 5.10% at $0.2304.
Since the start of 2019, Bitcoin is up 19.24%, Ethereum is up 67.69% and XRP is up 18.84%. Chainlink is up 95% and Tezos is up 111% since January 1st.
Crypto Tax Plan Recommended To South Korean Government
- Tax experts have advised that the Korean government should be applying a low-level trading tax on profits in cryptocurrency.
- According to a local news report, the government in the nation is expected to announce its tax reform plan at the end of this year.
Tax experts in South Korea have advised that the Korean government should be applying a low-level trading tax on profits in cryptocurrency before giving the public transfer income tax. According to a local news report, the government in the nation is expected to announce its tax reform plan at the end of this year.
Such a low-level trading tax was pushed in the agenda because of the lack of legal infrastructure to enact transfer taxation on transfers.
In a seminar that went down on the 21st of February, the South Korean government was advised by members of the Korean Tax Policy Association to act on this plan. The main argument was made that by taking such an approach to integrating income tax on crypto, it will see the most efficiency.
The proposal by the tax expert was agreed by the blockchain Association in Korea. Such a recommendation was justified as they said:“Related laws are still absent and the taxation infrastructure is still insufficient to cover cryptocurrencies and, as such, some supplements need to be added on the expense calculation side.”
On top of this, the association went on to say that before imposing a transfer tax, the clarity on defining cryptocurrency acquisition costs is a necessity. However, given that digital assets are being traded at such different rates on the different platforms in Korea, this isn’t going to be easy to define