For the past two weeks, the Brazilian government has been sending questionnaires to the country’s crypto exchanges soliciting information about their operations, Portal do Bitcoin reports.
The requests for info have been being sent through the exchanges’ online contact forms, and the notices are signed by a state prosecutor called Ana Paula Bez Batti.
The notice promises confidentiality and includes a 14-point questionnaire on exchange operations.
Exchanges are asked to respond within five days.
Though the notice also states that it is illegal to transmit it, Portal do Bitcoin obtained a copy.
An introduction to the questionnaire reportedly states that the information is sought to help establish a “stealth dossier” designed t0, “combat corruption and money laundering,” and, “protect the integrity of the (Brazilian) financial system.”
The questionnaire asks exchanges to outline how they are addressing compliance issues, moderating trades according to client’s stated income, confirming customer identities, tracking the “hashes” (records) of transactions in portfolios, and regulating the overall number of transactions on the exchange, presumably to limit manipulation.
Exchanges are also asked to state how they are, “mitigat(ing) risks related to money laundering and terrorist financing.”
Portal spoke to three exchanges about the subpoenas. All declined to be named in the reporting.
The first exchange said it cooperated entirely and answered all the prosecutor’s questions in a timely fashion.
Another said it was not aware of the questionnaire and said they’d seek it out.
Another told Portal do Bitcoin that they had declined to answer the questionnaire because it is not legally binding.
Portal do Bitcoin notes that the sender of the questionnaire likely knows which exchanges are aware of the notice because business contact forms typically issue automated confirmations whenever an inquiry is received.
The following is an unedited, automated translation of the questionnaire, courtesy of Portal do Bitcoin:
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?
2) What are the limits * offered to customers in relation to declared income? (* cash deposit limits in cash and Crypto-coins). Does Crypto-Exchange make any checks on the number of operations or amounts to prevent the customer from exceeding the limits related to their income?
3) The credit transfers received in the Crypto-Exchange account contains the identification of who was the originator, with the identification of your CPF or CNPJ? If not, how does the institution perform such identification? “
4) Does the Crypto-Exchange receive transfer of securities or send resources to people (physical or legal) other than those in the Exchange’s own register? In a practical example, in any case can a natural person withdraw a deposit made by a legal entity? Or the other way around? Or even, physical person X can withdraw deposit made by individual Y?
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?
6) What measures, if any, does Crypto-Exchange take to mitigate risks related to money laundering and terrorist financing?
7) Does the Crypto-Exchange or the partners have an overseas bank account with a balance greater than USD 100,000? If so, were they informed to BACEN?
8) What are the payment instruments accepted by Crypto-Exchange for the purchase of crypto-coins by its customers ? Specify whether they accept cash, debit or credit card, prepaid card, bank slip or some other means of payment.
9) Does Crypto-Exchange perform conversion between different types of crypto-coins? If so, what are the rules?
10) Does the Crypto-Exchange trade popular crypto-coins for their anonymity, such as Monero, Dash and Zcash?
11) How many accounts (legal entity and individual able to deposit, make transfers and withdrawals) about Crypto-Exchange have in their registers?
12) How many employees does Crypto-Exchange have in its records?
13) Crypto-Exchange makes use of some system to avoid trading in its crypto-currency platform with Blockchain history considered to be risky (risk, ie bitcoins linked to known thefts, illicit markets and other criminal activities)?
14) Does Cripto-Exchange make loans or does it work with some type of provisioning and payment of profitability? If so, what are the criteria for setting profitability? A “loan” also includes in the concept the activity in which Exchange receives an X number of capital (criptomoedas or cash in kind) and returns a monthly / half-yearly percentage etc to the investor.
The answers, as well as any doubts, can be answered through this email, within 5 DAYS. I emphasize that they will be part of a confidential file, have no fiscal character and will not be disclosed.