Some of the largest cryptocurrency exchanges in Brazil have agreed to create and adhere to a new self-regulatory code of conduct, and have collectively committed to enforcing know-your-customer (KYC) and other compliance-related protocols.
According to Criptonoticias, the initiative was launched by the Brazilian Association of Cryptoeconomics (known locally as ABC crypto) at the end of last week. The body has imposed what it called a "self-regulatory code for the Brazilian digital assets sector."
Trading platforms BitPreço, Foxbit, Bitcoin Market, NovaDax and Gravel are among the signatories. Together, these platforms represent more than 80% of the total volume of cryptocurrency transactions carried out in Brazil.
Although four crypto-specific bills have been submitted to parliament, Brazil has yet to come close to adopting any formal regulatory system for its fast-growing cryptocurrency sector. ABCripto spoke of the need to plug a "regulatory gap" with self-regulatory protocols and policies that it hopes will help legitimize the industry.
The group spoke of the need to impose rules "without hampering" the growth plans of its members, helping to "promote the trading of crypto assets", but also helping to "demystify" cryptocurrencies for the uninitiated and helping in the fight against cryptocurrency scams and fraud.
In addition to KYC policies, members will also need to increase security, strengthen legal compliance, safeguard user data, and commit to respecting free competition within the industry.
Members who do not comply with the new code, the organization said, could face warnings, fines or even expulsion in extreme cases.