Brazil to Summon Binance, Coinbase, Seeking Info on Local Operational Collaborations

Brazil’s tax department is reportedly calling out some of the major international crypto exchanges, seeking information on their operations and collaborations with local crypto service providers.

International crypto exchanges include Binance, Coinbase, OKX and KuCoin, which are not based in Brazil, but operating in the nation.

The country’s tax authorities told Reuters on Wednesday, that it would publish an ordinance this week, summoning these exchanges to furnish operational information.

Andrea Chaves, deputy secretary of inspection at Brazil’s revenue service noted that the move is to understand how these exchanges operate in Brazil and whether Brazilians follow its new tax regime.

“It’s an area of concern for us to understand first how they operate here, whether there’s any illegality or not. We are also concerned about having information on Brazilian wealth subject to taxation here.”

The Brazilian government also wants to learn how Binance, Coinbase and other foreign exchanges cooperate with crypto local service providers. For instance, Binance, the world’s largest cryptocurrency exchange, launched a Binance Card in Brazil in partnership with payment giant Mastercard, last year.

Binance also noted that Brazil is one of Binance’s biggest markets. Guilherme Nazar, as General Manager of Binance Brazil noted at the time that the country is “very relevant market for Binance” and that the company will continue to invest in new services for local users.

Brazil With Highest Crypto Adoption Rate in LatAm

The move comes at a time when Brazil is having one of the highest cryptocurrency adoption rates in Latin America.

A new Brazil Crypto Report from Metaco says a thriving fintech ecosystem has spurred the adoption of crypto. This has drawn more citizens into relationships with financial providers.

One in five Brazilians own cryptocurrency, and the country is projected to have digital asset revenues of $1.5 billion by 2027, the report added.

Last year, Brazilians declared 133.6 billion reais ($24.6 billion) in crypto assets, which is over 36% increase from 2022, the country’s revenue service data noted.

Further, Brazil’s Central Bank and the Securities and Exchange Commission of Brazil (CVM) are working on regulating the cryptocurrency market. The regulation aims to protect consumers and combating financial crimes.