It looks like Brazil’s hardcore tax laws are starting to hurt its crypto industry. Two digital exchanges in Brazil – Acesso and Latoex – have shut their doors permanently, claiming they cannot adhere to the country’s new tax laws which they cite as extremely strict and rigid.
Crypto Companies in Brazil Are Facing the Heat
Both trading platforms say they are facing heavy fines. In addition, the tax laws have caused a lot of people to exit the space altogether, and thus both companies are facing extremely low trading volumes – not enough to stay afloat.
Pedro Nunes – the CEO of Acesso – claimed in a statement:
After the Federal Revenue Service introduced these rules, we noticed a significant decrease in the trading volume. We also feel that the market has cooled off for smaller exchanges.
Crypto tax laws around the world are causing many companies and everyday traders to start feeling the burn. In America, for example, the tax laws have caused even more confusion amongst ventures that delve in both crypto and blockchain services. While a new draft of crypto tax regulations in the United States emerged last October, many claim these rules are still very confusing and have not clarified the trading space any further.
In Brazil, the new tax laws are also being cited as a major invasion of privacy. Implemented during the second half of last year, crypto holders are now required to report their identities and all transactions they’re part of to the nation’s tax agencies. This includes both large businesses and individual traders.
Furthermore, users must also report any crypto donations they give, along with withdrawals, deposits, barters and other transactions, leaving no room for individuals or enterprises to remain private. Anyone who fails to abide by these rules is subject to penalties and fines of up to $360.
This may not seem like much, but it’s not just the money that’s killing the crypto investing space in Brazil. Lawmakers now require that crypto traders invest some of their funds into new resources and enterprises.
This is very difficult for crypto startups, which often don’t possess the funds necessary for outside financial activities. Many times, they’re just struggling to keep themselves open for business, so the idea of putting money into other programs doesn’t make much sense to executives.
Too Many Fines
Latoex – which stands for Latin America Token Exchange – has also announced its decision to shut down. The company is selling all its assets to other companies and returning all investments to its clients. It was recently suspended by Brazil’s Securities and Exchange Commission and slapped with a $23,000 fine that the exchange is trying to get reversed.
Prior to this little stunt, Brazil was known as one of the top crypto havens in Latin America.
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Source: Live Bitcoin News