The cryptocurrency law barely passed in Brazil and the republic’s senator Marcos do Val (PODEMOS/ES) is already planning to change the rules, including the degree of asset segregation.
Law No. 14.478/2022, known as Marco das Cryptocurrencies, which came into effect late last year, underwent intense debates until it was passed. The bill that discussed the rules has been in effect since 2015, originating in the Chamber of Deputies.
When it passed the federal senate, lawmakers amended the rules and called for the inclusion of asset segregation by cryptocurrency brokers. In practice, this means that platforms do not mix customers’ cryptocurrencies with their own cryptocurrencies, which does not endanger customers’ assets in the event of bankruptcy.
FTX’s bankruptcy case further fueled debate on the subject as the brokerage did not practice asset segregation. That is, when it went bankrupt, it lost its cryptocurrencies and those of its customers.
However, when the bill returned to the Chamber of Deputies, members of Congress preferred to take the emphasis from the Senate, to pass a simpler project initially, but one that could be improved in the future.
Senator calls for the inclusion of asset segregation by cryptocurrency brokers into law
In the new law 1.536/2023, presented last Thursday (30), Marcos do Val asks that brokers have better mechanisms to protect against fraud against investors.
“Dealts with the provision of virtual asset services (Law No. 14,478 of December 28, 2022), to prevent fraud against its investors and to expedite the immediate recovery of these assets, in the event of anomalies and fraud.”
In his motivation, the senator acknowledges that the approval of the Marco das cryptocurrencies was very important for Brazil, which created a legal framework of rules.
However, he understands that improvements need to be made to the rules governing the market, asset segregation being one of the most important.
Senator recalled that international standards may apply to Brazil
Senator Marcos do Val understands that Brazil can take better advantage of the cryptocurrency market with a more robust rule. As an example, he mentioned that institutional investors look for places with safer rules, guaranteed by law, and that one of the best examples is the controversial BitLicense in New York.
“Another benefit of asset segregation in the Brazilian case is the increase in legal certainty and protection for institutional investors when comparing different international frameworks in which they can choose to do business. For example, some global regulatory frameworks are quite robust, as is the case with the NYDFS/BitLicense of the State of New York (US), which requires the segregation of customer custody.”
It is worth remembering that the text, as a bill, must be approved by a majority of the federal senate and chamber of representatives in addition to the president’s support for it to go into effect.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
