Brazil Hits the Brakes on Crypto: 24-Hour Pause on Big Transfers to Keep Fraud on Ice 🥶

Brazil's central bank will require virtual asset service providers to place precautionary holds of up to 24 hours on certain outbound transfers as part of new anti-fraud rules taking effect Jan. 1, 2027. The Banco Central do Brasil said Friday the requirement applies to funds exceeding $10,000, whether in a single transaction or aggregated across a customer's daily activity. Providers must also hold any additional transfers flagged under their own risk-management policies, notify customers when funds are paused, and keep records of fraud incidents, attempted fraud, and corrective actions. A virtual asset service provider may release a transfer before the 24-hour window expires if it completes its assessment under parameters set by the central bank.

The move places Brazil among a growing group of jurisdictions tightening digital-asset safeguards as regulators confront scams that exploit the speed and cross-border reach of cryptocurrencies. In Japan, the Financial Services Agency and National Police Agency have asked crypto exchanges to restrict withdrawals after customers deposit fiat currency or purchase digital assets, preregister withdrawal addresses, impose waiting periods on newly added addresses, set customer-specific withdrawal limits, strengthen monitoring, deploy phishing-resistant multifactor authentication, and verify that the name of a bank remitter matches the crypto account holder. Unlike Brazil's binding regulation, the Japanese measures are non-binding, with exchanges left to determine implementation based on their operations and exposure to misuse.

European authorities have separately flagged incidents of criminals impersonating regulators and crypto firms, often targeting users searching for licensed providers after the European Union's Markets in Crypto-Assets licensing deadline. France's financial regulator has reported cases involving fake websites, while the European Securities and Markets Authority said scammers had misused its identity and logo in falsified documents. Brazil's new rules add to a series of measures the country has pursued to address crypto-related risk, including a recent decision to bar crypto settlement in regulated cross-border payment rails.