SKN | Brazil Targets Crypto Fraud With Up to 24-Hour Transfer Holds

Key Points

• Brazil’s central bank will require virtual asset service providers to impose precautionary holds of up to 24 hours on certain cryptocurrency transfers beginning January 1, 2027.
• The rules will apply to funds received above $10,000 that are transferred to overseas providers or self-custody wallets, while other transactions may also be delayed when they require additional risk review.
• The measure forms part of Brazil’s broader effort to combat fraud and strengthen safeguards around the speed and cross-border reach of digital assets.

Brazil’s central bank is introducing new measures designed to prevent cryptocurrency-related fraud by giving virtual asset service providers additional time to review suspicious transactions.

Under the new rules, providers will be required to place precautionary holds of up to 24 hours on certain transfers involving foreign cryptocurrency platforms and self-custody wallets.

The Banco Central do Brasil said the requirements will take effect on January 1, 2027, giving virtual asset service providers time to implement the necessary monitoring and risk-management procedures.

$10,000 Threshold Applies to Certain Transfers

The rules will apply to funds received above $10,000, either through a single transaction or based on the customer’s aggregate transactions during a single day.

The precautionary hold is intended to provide providers with additional time to identify potential fraud before funds leave the regulated platform.

Other transfers may also be placed on hold when they require additional investigation under a provider’s established risk-management policies.

A provider may complete its assessment and release the funds before the 24-hour period expires, provided the review follows parameters established by Brazil’s central bank.

Customers Must Be Notified

Under the new framework, virtual asset service providers must inform customers when transfers are subject to a precautionary hold.

Providers will also be required to maintain records covering fraud incidents, attempted fraud and corrective measures taken in response.

The requirements place greater responsibility on crypto platforms to identify suspicious activity before transactions are completed rather than relying solely on investigations after funds have already been transferred.

Brazil Joins Global Anti-Scam Effort

Brazil’s new rules reflect a broader international effort to address cryptocurrency scams and the challenges created by fast, cross-border digital asset transfers.

Japan has introduced similar anti-fraud measures, with financial and law enforcement authorities asking cryptocurrency exchanges to restrict certain withdrawals after customers deposit fiat currency or purchase digital assets.

Japanese authorities have also recommended preregistering withdrawal addresses and implementing waiting periods before newly added addresses can be used.

Additional proposals in Japan include customer-specific withdrawal limits, stronger monitoring systems, phishing-resistant multifactor authentication and verification that the name of a bank remitter corresponds with the cryptocurrency account holder.

Unlike Brazil’s requirements, the Japanese measures are not binding, allowing exchanges to determine implementation according to their individual operations and exposure to potential misuse.

European Regulators Warn of Crypto Impersonation Scams

European regulators have also raised concerns over fraudulent activity targeting cryptocurrency users.

Authorities have warned that criminals are impersonating regulators and legitimate cryptocurrency companies as users seek licensed providers following the European Union’s Markets in Crypto-Assets licensing requirements.

France’s financial regulator has reported cases involving fraudulent websites, while the European Securities and Markets Authority has warned that scammers have used its identity and logo in falsified documents.

The developments demonstrate that crypto-related fraud is increasingly being addressed through both transaction monitoring and stronger consumer-protection measures.

Closing Insights

Brazil’s upcoming transfer-hold requirements represent a significant expansion of the country’s cryptocurrency fraud-prevention framework. By giving virtual asset service providers as much as 24 hours to review certain transactions, regulators are attempting to balance the speed of digital asset transfers with stronger safeguards against scams and illicit fund movements. As more jurisdictions introduce transaction monitoring, withdrawal delays and identity protections, crypto platforms are likely to face increasingly stringent obligations designed to bring digital asset transactions closer to established financial-sector compliance standards.