Brazil to delay large crypto transfers abroad, mandate self-custody

The rule specifically targets transfers of funds deposited in Brazilian reais or cryptocurrencies to foreign platforms or self-controlled wallets. Transactions exceeding the equivalent of $10,000, whether in a single instance or across multiple transactions on the same day, will be subject to the mandatory hold. Smaller transactions may also face delays if exchanges identify them as high-risk.

According to the central bank, cryptocurrencies, including stablecoins, have been utilized to move illicit funds before they can be recovered by victims or institutions. The delay is not permanent; exchanges can release a transfer before the 24-hour mark if their risk assessment indicates no signs of wrongdoing. They are required to document such decisions and inform customers about the hold.

This policy places greater responsibility on exchanges to evaluate risks based on customer profiles, transaction details, counterparties, and the destination jurisdiction. Regina Pedroso, president of the Brazilian tokenization group Abtoken, expressed concerns that the policy could increase costs for legitimate users and diminish the competitiveness of domestic exchanges, according to local news outlet Portal do Bitcoin.