Brazil’s Council for Economic Defense Wants Crypto Exchanges to Answer Survey or Expect Fees
Brazilian Antitrust Watchdog Sends Questions To Crypto Exchanges
The Brazilian Administrative Council For Economic Defense (CADE), which is operated by the Ministry of Justice, has recently sent a questionnaire to crypto exchange whose banks accounts have previously been closed, local media outlets have reported.
According to the reports, the CADE has sent questionnaires to ten companies: Bitcoin Market, Bitcambio, BitcoinTrade, Foxbit, Walltime, Braziliex, BitBlue, Open Digital Capital (OTC), e-juno, and Profitfy. This happened after the institution has probed six major banks to discover whether they had closed accounts for crypto exchanges or not.
An initial report was sent by the Brazilian Association of Cryptomoedas and Blockchain (ABCB) has claimed that Banco do Brasil had closed Atlas Quantum’s account. The CADE has warned the companies that they will be fined with $5,000 BRL (about $1,300 USD) if they fail to send answers. The penalty could be increased up to 20 times “if necessary”.
In the questionnaire created by CADE, they have to explain their business and state whether they were able to open a bank account or not and whether it was closed by some financial institution. There were even talks that some banks restricted the operations of the exchanges as a way to harm their business, so this is part of why the investigation is being made.
The companies have to describe briefly their business and then answer 10 questions that dig deeper on the subject. These questions are generally related to banking and if they suffered any type of sanction from the banks.
According to a local crypto news outlet called Portal do Bitcoin, one of the main reasons why the banks decided to close some accounts was because they did not comply with the National Classification of Economic Activity. Because of this, one of the focus of the questionnaire is to discover how the exchanges declared their activities to the banks.
However, some questions are focused on the attitudes of the exchanges toward illicit activities and it asks them what they have done to prevent money laundering and terrorist financing in their institutions, as well as organized crime. Questions also probe about Know Your Customer (KYC) procedures and whether the exchanges have ever refused clients.
The exchanges will be able to ask for the answers to be considered “restricted access”, but the final decision will be made by CADE on whether to disclose the answers of the companies to the public or not.