Brazil has become the latest country to start investigating cryptocurrency exchanges. Brazilian crypto exchanges have reportedly been sent a 14-point questionnaire. Unlike many other regulatory investigations, this was prompted by a severe data breach.
The questionnaires have been disclosed amid news that the Atlas cryptocurrency investment platform was hacked, with the data of over 264,000 customers compromised. Atlas could well be a Ponzi scheme, much like BitConnect. Users deposit money and then expect to make a profit through the platforms arbitrage investments, and customers are promised 3% returns regardless of market conditions.
Crypto exchanges survey distribution
According to a local news outlet, top crypto exchanges in Brazil have been sent these questionnaires through their online contact forms since August 15th. The documents are being sent under the authority of the Minister of Finance, as a direct subpoena from the Brazilian government. The local outlet indicated that it reached out to three exchanges in response to the questionnaires.
Among the crypto exchanges, one answered all the questions, one said it did not receive any document, and the other said it would not comply, as it was sent through a contact form and was not an official document. With regard to the exchange that said it did not receive any form of notification, an autoresponder response is typically enough to satisfy courts for proof of receipt.
The 14-point questionnaire
The questions are centered around cryptocurrency exchange operations, with the aim of combatting money laundering. Some of the sample questions are included below-
“1) What are the Crypto-Exchange compliance rules for your customers? What is the method of conferring personal documents submitted for the account registration in Exchange?”
“5) What are the wallet HASHs (hot wallets and cold wallets) of the different crypto-coins used by Exchange to store the crypto-coins of its users?”
“10) Does the Crypto-Exchange trade popular crypto-coins for their anonymity, such as Monero, Dash and Zcash?”
The answers to the questions were to be completed within five days. It is likely that the crypto exchanges in Brazil will be subject to further scrutiny after the Atlas hack. The question is whether a mature regulatory approach will be taken, as in Japan, or whether a blanket ban will be introduced, as in China. While the Atlas breach was disclosed on August 25th, it is widely believed that the breach happened much sooner and that this prompted the questionnaires.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.