The Brazilian Senate plenary approved a bill regulating crypto transactions Tuesday night.
The bill, introduced by Senator Flávio Arns, moves next to the Brazilian Chamber of Deputies, which will vote on the bill. If approved, the executive branch then has the power to veto it.
The text creates the label "virtual service providers" for crypto companies, which will be subject to the same responsibilities as other financial institutions for crimes against the Brazilian financial system.
If approved, the bill will prevent the Brazilian Securities and Exchange Commission from overseeing the crypto market, except for initial coin offerings (ICO). In addition, the bill said the Brazilian executive branch will designate an agency to supervise the crypto sector.
The Brazilian Senate's economic affairs committee had approved Arns’ bill in February, shelving two other crypto bills presented by senators Styvenson Valentim and Soraya Thronicke.
The bill also designates crime carried out by virtual assets as punishable by a penalty of between two and six years in prison. The original text proposed a penalty of between four and eight years but it was reduced after a request made by Senate President Rodrigo Pacheco.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.