Brazil Introduces Stricter Regulations for Cryptocurrency Service Providers

The Central Bank of Brazil has tightened its grip on the cryptocurrency industry by introducing stricter regulations for Virtual Asset Service Providers (VASPs). Starting today, all VASPs applying for or renewing licenses will be required to undergo independent financial audits. The audit will cover crucial areas such as anti-money laundering and counter-terrorism financing, segregation of customer funds, risk management mechanisms, and employee training.

The auditing institutions must be registered with the Brazilian Securities Commission (CVM), ensuring that they meet the necessary standards. This new regulation further strengthens compliance control over the cryptocurrency industry, which was previously legislated to establish a regulatory framework for virtual assets in 2022.