Cryptocurrency is a challenge in the fight against crime even after the law – 08/16/2023 – Market

Even after a specific law for cryptocurrencies came into effect in Brazil, experts point out a series of challenges that the country still needs to face in this sector, starting with the fight against crimes committed with digital assets, such as bitcoin and ethereum.

Approved by Congress at the end of November and then sanctioned by Jair Bolsonaro (PL), the crypto asset law (number 14.478/22) came into force on June 20 of this year, but its practical effects were almost non-existent.

This is because most of the rules for this market will still be established by the Central Bank, defined as the body responsible for regulating digital assets. A task that, according to lawyer Pierpaolo Cruz Bottini, is far from simple.

“The difficulty, also discussed in the European Union and the United States, is not to stifle this market, which is dynamic and innovative, but, at the same time, regulate the contact of the virtual world of cryptoassets with the real world, to avoid money laundering. and all the frauds that may occur”, he says.

Professor of criminal law at USP, Bottini has been coordinating since last year a research group that has just published the book “Cryptoactives and Money Laundering”, with a launch event scheduled for this Thursday (17).

“It’s the faculty trying to fulfill its role, by dealing with a current issue, which is still being regulated”, says Bottini, who coordinated the edition of the book alongside Felipe Longobardi Campana and Marina Brecht, both postgraduate law students. graduation from USP.

The result of meetings conducted by the study group, the work brings together articles by various authors on the international scenario, the national regulatory landscape and aspects related to the repression of crimes involving crypto assets.

The group’s idea is to maintain proximity with bodies such as the Central Bank, Coaf (Council for the Control of Financial Activities) and CVM (Securities and Exchange Commission) to discuss the numerous aspects that need care in regulation.

For example, economist Gabriel Galípolo, current director of Monetary Policy at the Central Bank, has already participated in debates with the research group.

For Bottini, the meetings suggest optimism: “I imagine, from the conversations that the group itself had, that this Central Bank regulation will follow international parameters and will allow for better prevention of money laundering and fraud in this sector”.

The lawyer insists on the issue of money laundering as he considers it one of the main points of attention in the universe of cryptocurrencies.

“Although it is very important for the development of financial transactions, the digital asset is anonymous in many situations; that is, the owner of a certain asset is not known. In addition, international transactions are very fast”, he says.

Without crypto assets, a person will face many obstacles in moving large amounts through the banking system. Those who want an anonymous and less regulated alternative will need to carry suitcases full of money, buy works of art or travel with jewelry, for example.

From the criminal’s point of view, these are much riskier options than taking a pen drive or sending the security key from a brokerage that operates in another country.

“The sending through the banking system has greater control than a transaction via digital asset. The idea of ​​regulation is to close this hole and create a compatible control system”, says Bottini.

Not surprisingly, hackers, for example, often demand payments in bitcoins or other digital currencies to provide criminal services. More broadly, a report by the Chainanalysis institute indicated that, in 2019, almost US$ 2 billion with possible illegal origin was moved in bitcoins.

In return, Gafi (International Financial Action Group) recommends that cryptocurrency brokerages get to know their customers and communicate Coaf about any suspicious act of money laundering, as banks already do.

Another important point pending regulation is asset segregation – a legal device that would prevent brokerages from using investor funds for their own operations.

It was the absence of this mechanism that led Gisele Bündchen and Tom Brady to lose BRL 232 million with the collapse of FTX, a platform for buying and selling cryptocurrencies.