Brazil's congress backs law for more crypto regulation

According to local media, the bill would force all locally active crypto providers to have a physical entity in the country, with fines and even prison sentences for those breaching the new rules

Brazil's lower house of Congress late on Tuesday approved a bill that aims to boost oversight of the country's cryptocurrency sector, after one of the world's largest crypto exchanges collapsed earlier this month.

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The proposal, which would see the sector regulated by a government-appointed federal agency, will now pass to outgoing President Jair Bolsonaro for approval.

The new rules would apply to legal entities that exchange virtual currencies for local or foreign currencies, exchange virtual assets, conduct transfers or are involved in financial services connected to issuers or vendors of virtual assets.

According to local media, the bill would force all locally active crypto providers to have a physical entity in the country, with fines and even prison sentences for those breaching the new rules.

The bill would, according to media, give companies a grace period for compliance.

The move follows this month's collapse of Bahamas-based crypto exchange FTX, which prompted investigations by Bahamian and U.S. authorities.