Brazil Orders Reporting of $10K Self-Custody Crypto Wallet Trades

Central Bank of Brazil Eyes Self-Custody Wallets In New Resolution

The Central Bank of Brazil has issued a new resolution to deepen oversight of self-custody wallets and the funds Brazilian users keep under their direct control.

On Wednesday, the Central Bank of Brazil issued Resolutions 588 and 589, which collectively amend previous rules on applying anti-money laundering and terrorism financing (AML/TF) controls, strengthen reporting requirements for virtual asset service providers (VASPs), and close the Brazilian crypto system to unauthorized service providers.

Resolution 588 requires institutions authorized to operate by the central bank to report operations “relating to transfers of virtual assets to or from self-custodial portfolios of a value equal to or greater than the equivalent of US$10,000.00.”

The institution highlighted that the measure was directed to strengthen the oversight of self-custody wallets, which are controlled by users rather than VASPs—a situation that it said can “reduce the availability of information for monitoring and risk assessment purposes, unlike cases in which assets are held in custody in an institution authorized by the Central Bank.”

The data will be submitted to the national money laundering watchdog, the Council for Financial Activities Control (COAF), which could then organize these transactions and potentially create a self-custody database for these addresses, mapping the holdings of Brazilian users leveraging authorized centralized exchanges.