On December 21, 2022, Law No. 14,478 (Lei No. 14.478, de 21 de Dezembro de 2022) regulating virtual asset services in Brazil was promulgated by then President Jair Bolsonaro. The new law provides for guidelines to be observed in the provision of virtual asset services and in the regulation of virtual asset service providers. It also amends Decree-Law No. 2,848, of December 7, 1940 (Criminal Code) to provide for the crime of fraud with the use of virtual assets, securities, or financial assets; amends Law No. 7,492, of June 16, 1986, which defines crimes against the national financial system; and amends Law No. 9,613, of March 3, 1998, concerning money laundering to include service providers of virtual assets in the list of its dispositions. Law No. 14,478 was published on December 22, 2022, and will enter into force 180 days after its publication. (Law No. 14,478, art. 14.)
Virtual Assets
For the purposes of Law No. 14,478, a virtual asset is considered to be the digital representation of value that can be traded or transferred by electronic means and used to make payments or for investment purposes, not including:
It will be incumbent upon an agency or entity of the federal public administration defined in an act of the executive branch to establish which financial assets will be regulated for the purposes of Law No. 14,478. (Art. 3 (sole-para.).)
Virtual Asset Service Providers
The provision of virtual asset services must observe the following guidelines, according to parameters to be established by the agency or entity of the federal public administration defined in an act of the executive branch:
According to article 5 of Law No. 14,478, a virtual asset service provider is considered to be the legal entity that performs, on behalf of third parties, at least one of the virtual asset services, understood as:
The body or entity of the federal public administration indicated in an act of the executive branch may authorize the performance of other services that are directly or indirectly related to the activity of the virtual asset service provider referred to in article 5. (Art. 5 (sole-para.).)
An act of the executive branch will attribute to one or more agencies or entities of the federal public administration the regulation of the operation and the supervision of the virtual asset service provider. (Art. 6.)
Penal Code
Article 10 of Law No. 14,478 added article 171-A to the Penal Code (Código Penal, Decreto-Lei No. 2.848, de 7 de Dezembro de 1940), which punishes with four to eight years in prison and a fine the organizing, managing, offering, or distribution of portfolios or intermediation of operations involving virtual assets, securities, or any financial assets in order to obtain an illicit advantage, to the detriment of others, inducing or keeping someone in error through artifice, ruse, or any other fraudulent means.
Money Laundering Law
Article 1 of the Money Laundering Law (Lei No. 9.613, de 3 de Março de 1998) punishes with three to 10 years in prison and a fine whoever conceals or disguises the nature, origin, location, disposition, movement, or ownership of assets, rights, or values arising directly or indirectly from a criminal offense.
Article 12 of Law No. 14,478 amended paragraph 4 of article 1 of the Money Laundering Law to provide that the punishment will be increased by one-third to two-thirds if the crimes defined in Law No. 9,613 are committed repeatedly, through a criminal organization, or through the use of virtual assets.
Consumer Protection Code
The provisions of the Consumer Protection Code (Código de Defesa do Consumidor, Lei No. 8,078, de 11 de Setembro de 1990) apply to operations carried out in the virtual asset market, where appropriate. (Art. 13.)
Eduardo Soares, Law Library of Congress
February 1, 2023
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