The Regulatory Framework for Crypto Assets, approved by Law No. 14.478 of December 21st, 2022, will come into force 180 days after its publication (06.18.2023). However, the guidelines brought in by the law, which must be observed by the sector of virtual assets (crypto) that do not represent securities, are already starting to be incorporated. Crypto Assets representing securities remain subject to the regime of Law no. 6.385/1976 and the regulation of the Brazilian Securities and Exchange Commission (to learn more about the qualifications of crypto assets, click here).

The Framework defines a virtual asset as the digital representation of value that can be traded or transferred by electronic means and used for payment or investment purposes, except for (i) national and foreign currencies; (ii) electronic currency; (iii) instruments that provide their holder access to specified products or services or benefits arising from these products or services, such as points and rewards from loyalty programs; and (iv) representations of assets whose issuance, bookkeeping, trading or settlement is provided for by law or regulation, such as securities and financial assets.

The operation of the virtual asset services providers depends on prior authorization from an agency or entity of the Brazilian Federal Public Administration. However, the regulation of the procedure and the indication of the public entity are still pending. As indicated, the relevant entity must grant at least six months for the adequacy of the service providers that are in activity.

A relevant point brought by the Framework is the inclusion, in the Criminal Code, of a new type of fraud, punishable by imprisonment from four to eight years and a fine, for those who “organize, manage, offer or distribute portfolios or intermediate operations involving virtual assets, securities or any financial assets to obtain an illicit advantage to the detriment of others, inducing or keeping someone in error, through artifice, trickery, or any other fraudulent means”.

The Blockchain Desk at Fraga, Bekierman e Cristiano Advogados is available to clarify any doubts on the subject.