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▲ South America, cryptocurrency, cryptocurrency regulation/AI-generated image
The cryptocurrency money laundering crackdown in Latin America is rapidly tightening, with Brazil's mandatory audits for operators, Mexico-EU cooperation, and US sanctions against Brazilian criminal organizations simultaneously pressuring the market.
According to cryptocurrency media outlet Bitcoin.com on May 31 (local time), the Central Bank of Brazil has newly added an independent audit requirement for the business license review of Virtual Asset Service Providers (VASPs). Mexico and the EU discussed ways to block international money laundering using cryptocurrency, and the Donald Trump administration designated major Brazilian criminal organizations as specially designated global terrorists.
In accordance with Normative Instruction No. 739 announced by the Central Bank of Brazil on Friday, virtual asset service providers must submit an independent audit report from an institution registered with the Brazilian Securities and Exchange Commission (CVM) to obtain a business license. This audit must be in the form of a reasonable assurance report and include institutional policies, organizational structure, employee training, risk assessment of the company's products and services being used for money laundering and terrorist financing crimes, and customer identification procedures.
Mexico and the EU have also made combating cryptocurrency money laundering a joint agenda. Mexican Foreign Minister Roberto Velasco Álvarez and European Commission Vice-President Kaja Kallas stated at a press conference for the 8th Mexico-EU Summit that they are reviewing cooperation measures to curb cryptocurrency money laundering across both jurisdictions. At this meeting, Mexican President Claudia Sheinbaum and European Commission President Ursula von der Leyen signed a trade agreement, including a 5 billion Euro investment in Mexico.
Álvarez said, “Regarding security cooperation between Mexico and the EU, we discussed today how criminal organizations operate globally, such as money laundering, and the issue of cryptocurrency being used in these illegal activities.” Bitcoin.com reported that this discussion shows the increasing weight of regulation and international cooperation in the Latin American cryptocurrency market.
US pressure has also expanded, targeting Brazilian criminal organizations. US Secretary of State Marco Rubio announced on Wednesday the designation of Comando Vermelho (CV) and Primeiro Comando da Capital (PCC), two of Brazil's largest criminal organizations, as specially designated global terrorists. Rubio also stated his intention to designate both organizations as Foreign Terrorist Organizations (FTOs) starting June 5.
Rubio explained that the two organizations command thousands of members, have carried out brutal attacks against Brazilian police, public officials, and civilians, and have expanded their activities beyond Brazil's borders. Bitcoin.com reported that both organizations have been identified as using cryptocurrency for money laundering purposes and as a means to expand their core criminal activities. The strengthening of Brazil's audit obligations, Mexico-EU cooperation, and US terrorist designations have collectively heightened regulatory risks in the Latin American cryptocurrency market.
*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*
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