Two Brazilian cryptocurrency exchanges have been forced to shut down following the enactment of new tax laws.
Following reports of rampant cryptocurrency-related fraud in 2019, Brazilian politicians have created and enforced new tax regulations for the industry of cryptocurrency.
According to a report by Bitcoin.com, exchanges Acesso and Latoex are two of the first casualties of the increased regulation. Both exchanges have decided to end operation, rather than pay the hefty fines and comply with strict regulation in the face of shrinking trading volume.
Pedro Nunes, co-founder of Acesso Bitcoin, told Portal do Bitcoin,
After the Federal Revenue Service introduced these rules we noticed a significant decrease in the traded volume. We also feel that the market has cooled off for smaller exchanges.
The new regulations, implemented in August 2019, require traders and brokerages to report all transactions involving cryptocurrencies. Failure to comply results in penalties ranging from 500 BRD to 1500 BRD ($120 – $360).
Exchanges say that compliance with the new regulation requires expensive investment into new resources, which has been untenable for smaller and less profitable organizations.
Featured Image Credit: Photo via Pixabay.com