#149: Mercado Bitcoin 💔 ABCripto
Plus: Binance promotes Nazar to VP for Latam; BlueBenx founder arrested in Portugal
Olá pessoal!
Greetings from sunny Minnesota and welcome back to 🇧🇷Brazil Crypto Report for the week of July 15-19, 2024.
Sadly I’ll be missing Blockchain Rio next week. Looks like it’s going to be a great event so I look forward to hearing about it from folks who attend and on social media, etc.
🔍What’s in BCR this week?
Binance’s Brazil country manager Guilherme Nazar Hadad is now VP for Latin America
Mercado Bitcoin and ABCripto are parting ways
BlueBenx founder is arrested in Portugal after 18 months on the run
Thanks for reading and have a great week!
-AWS
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New podcast!
This week I talk to Rita Martins about her new book Web3 in Financial Services, which explores the intersection of blockchain, Web3 and Tradfi from the vantage point of a financial services practitioner.
In the book, she explores Central Bank of Brazil’s Drex CBDC project as a prototype example of how the Tradfi and decentralized finance worlds will overlap and highlights many of the use cases piloted during the 2022 LIFT Challenge.
Rita has a professional background working on digital transformation projects at places like HSBC and Accenture, and her book is a great read for financial services professionals who want to better understand the implications of blockchain without all of the hype and fluff.
🎧 You can find Brazil Crypto Report content wherever you listen to podcasts: Spotify | Apple Podcasts | Amazon | Anchor | YouTube
Binance promotes Nazar to VP of Latam
Guilherme Haddad Nazar was named Binance’s regional vice president for Latin America after previously serving as director general for Brazil since late 2022. In the new role he will lead strategy and operations for the exchange in other countries in the region.
Frida Vargas and Daniel Acosta, Binance’s director generals for Mexico and Colombia, Central America and the Caribbean, respectively, will report up to Nazar.
In a statement, the exchange articulated that Latin America is a key region because it is home to some of the world’s primary markets for crypto adoption.
Nazar said in the statement:
“The democratic and accessible DNA of digital assets is of great value to Latin Americans, and we are determined to play a key role in the adoption journey, working side by side with policymakers and partners to help build a solid ecosystem.”
Prior to joining Binance, Nazar was head of operations for Uber in Brazil and vice president of Loft — a real estate technology startup.
Valor Portal do Bitcoin CoinTelegraph Brasil
Mercado Bitcoin exits ABCripto, citing “strategic differences”
Mercado Bitcoin has departed ABCripto, the trade association which it helped found, over differences in priorities and interests. Instead, it will ramp up its advocacy efforts within ABFintechs and Anbima.
The exchange explained in an official statement:
“ABCripto played an important role in creating regulatory frameworks, but, from MB's perspective, the current agenda does not meet the evolving needs of the crypto ecosystem for Brazilian entrepreneurs.”
CEO Reinaldo Rabelo told Neofeed that the group’s portfolio of interests and members had grown “too broad” and that it had been captured by entities who “in our view don’t operate correctly in Brazil.”
“These actors do not defend the development of the ecosystem, which is why we founded ABcripto.”
More specifically, Rabelo noted that the question of whether a company need a CNPJ to operate in Brazil became contentious:
“Requiring a CNPJ, a representative in Brazil, seems natural and obvious, but ABcripto thinks that it is not important, because none of these foreign companies want to place their partners with responsibility in Brazil. If there is a problem — Brazil will be left with the loss.”
Rabelo also explained that he believes ABCripto will eventually allow Binance into the association:
“We think that ABcripto's next step will be to affiliate with Binance, because it has already affiliated companies with the same profile. And we don’t want to be there when Binance is associated, because we are on the complete opposite spectrum of what Binance is, whose founder is in prison for financing terrorism, money laundering.”
In a note to press, ABCripto said that it had not yet received any formal request from MB to leave the group.
“It is important to remember that ABCripto, which today has more than 50 members, represents the cryptoeconomy market in a broad sense, and is dedicated to the development and organization of the sector. As an association, our purpose is to promote a safe environment from a legal and business point of view, always working together with regulatory bodies and the market.”
You can see more color on Rabelo’s Linkedin post announcing the departure.
AWS’s take: While this all sounds spicy it’s worth remembering that this is a normal phenomenon in the world of trade associations and lobby groups. The larger a group becomes, the more difficult it becomes to align on interests and priorities. As these groups grow, more pressure mounts to bring in more revenue by expanding membership ranks.
These dynamics are especially true in the world of crypto where there are many types of businesses and interests being represented, and many of these entities are transient by nature.
Recall that there was a similar conflict in the US a couple years ago when Coinbase quit the Blockchain Association because the BA decided to admit Binance.US as a member. Coinbase went on to cofound a separate lobby group, the Crypto Council for Innovation, and then eventually rejoined BA once Binance.US became irrelevant.
Portal do Bitcoin InfoMoney Valor CoinTelegraph Brasil
Trexx focusing on financial education tools in its gaming platform
Trexx is incorporating new financial education opportunities through its blockchain gaming platform — which connects gaming developers and players with items exchangeable for real value.
The blockchain gaming phenomenon is seen by many as a potential means of economic and financial opportunity for communities around the world.
Trexx has a testnet platform by which users can easily connect to a variety of blockchain games via a WalletConnect integration, as well as a second platform that helps users interact with airdrop prorgrams.
CEO Helo Passos explained to Valor:
“Trexx is a funnel and I engage young people with the interaction between games and financial education so that they are prepared for other services that change their conditions”
Passos explained that she will also be introducing microcredit offerings to blockchain gamers based on the user’s engagement history
“These are loans of 60 to 150 days and from US$30 to US$100. They are used to purchase other gaming assets. In the long term, we hope to expand until he can use them to pay bills,”
Trexx is in the process of finalizing gaming and finance projects in other countries around the region, including Chile, Argentina, Colombia, Venezuela and Uruguay.
BlueBenx founder arrested in Portugal
Roberto Cardassi was arrested in the city of Braga, Portugal and will need to appear every three weeks before the Guimarães Court of Appeals pending extradition to Brazil.
Cardassi was the founder of BlueBenx, which was a pyramid from the 2017 era that created its own cryptocurrency and promised customers returns of up to 66% per year. It collapsed on August 11, 2022, leaving thousands of investors with losses of R$160 million (US$28 million).
Cardassi has been missing since the scheme collapsed in 2022.
Portal do Bitcoin BeinCrypto CoinTelegraph Brasil
Brazil’s first tokenized FDIC is live
The FDIC is structured by Prinz and Oliveira Trust and powered by Liqi Digital Assets. It invests in commercial notes, receivables certificates, and other securities represented by tokens.
Recall that a FDIC is a credit rights investment vehicle that typically invests at least 50% in credit securities originating from a company’s accounts receivables — so bills, credit card receivables and rentals.
The fund expects to raise R$50 million in the next 12 months.
Tokenized FDICs, in which roles are programmed into smart contracts for efficiency purposes, have become a much-discussed use case over the last year.
Eduardo Guedes, CEO of Prinz, said in a statement:
“The credit and FIDCs market in Brazil has shown constant evolution in recent years, whether due to regulatory aspects or demands for more qualified and transparent products. The use of new technologies that make the credit chain more efficient is very well regarded.”
Net funding from FDICs in 2023 was R$24 billion (US$4.3 billion), according to Anbima.
🗞Brazil Crypto News Rundown
📈 Markets
B Fintech, an entity with ties to Binance that is registered with the São Paulo Commercial Board, adjusted its share capital from R$50,000 R$18.7 million in a March 13 filing.
The document states that the company’s only partner in Brazil is Dublin-based Binance Holdings Limited
The representative of Binance Limited in Brazil is Bruno de Luca Zanatta, of the Mourão Campos law firm
Binance has long claimed that B Fintech is a separate, unrelated entity. However, Brazilian courts have ruled on three occasions that the entity could be held responsible in cases where Brazilian citizens were injured by Binance.
Until April 2022, Changpenz Zhao was the only partner of B Fintech before being replaced by Binance Holdings Limited. (Portal do Bitcoin)
Lumx is launching a US$250,000 Latam-focused blockchain accelerator program in conjunction with Polygon. To qualify for grants, projects must be using Lumx APIs and be built on any blockchain connected to Agglayer, Polygon’s aggregation layer. (Exame)
Hurst Capital announced a new token investment offer tied to the repertoire of musical artist Kadu Martins. Through the tokens, investors have access to revenue from song collection. (CoinTelegraph Brasil)
Viden.vc invested in Liquidium, a platform that allows peer to peer lending on the bitcoin network. (Portal do Bitcoin)
Outlier Ventures and Morgan Creek Digital are teaming up to launch their first accelerator program in Latin America. Chosen teams will receive up to US$200,000 in investment funding and three months mentoring from industry experts in exchange for an equity stake or future token allocation. Benjamin Meyer, chief growth officer at Outlier Ventures, said in a statement:
“We’ve seen up close the incredible founders in Latin America already in our portfolio and are excited to focus on a program specifically for the region as we continue to help build Web3 ecosystems globally.” (CoinTelegraph Brasil)
📲 Adoption
Moonbeam Network announced a new partnership with Rarible, an NFT marketplace, for commercializing NFTs. The collection to be offered will by Carbify, an RWA platform that allows users to invest in tokenized representations of trees of the Amazon rainforest and collect carbon offset credits. Jaap Harmsma, co-founder of Carbify, said in a statement:
“With the new architecture, users will be able to purchase NFTrees from any chain and claim their $aCO2 tokens from any chain, all in compliance with EU regulations.” (CoinTelegraph Brasil)
Nuclea announced the launch of Nuclea Chain, which it will use to offer tokenization services. It looks to offer these services to banks, direct credit societies, FDICs, and crowdfunding and other asset distribution platforms: Rodrigo Furiato, vice president of business at Nuclea, said:
“We already have the network operating and by the end of July we will have the first case of tokenized duplicates being transacted in production. We are starting with duplicates, but we hope to broadly offer the market the possibility of tokenizing different types of assets and receivables from September onwards.” (Portal do Bitcoin)
A new project in Aldeia Gamir, a city in the Amazon state of Rondonia, will teach digital literacy concepts like blockchain to indigenous people of the Paiter-Surui ethnic group. The Amazon Tech House, as it is being called, is being opened by Play4Change with support from Polygon. (Portal do Bitcoin)
Binance is looking to hire a suspicious activity investigator in São Paulo. (Livecoins)
Bitso announced an integration with Lightspark to bring bitcoin Lightning Network payments to its client base. (CoinTelegraph Brasil)
Adoption of Drex was questioned by 46% of those interviewed for a new survey by the Brazilian Institute of Research and Data Analysis. (CoinTelegraph Brasil)
Dinamo Networks CEO Marco Zanini explained how he sees the differences between Pix and Drex unfolding in an interview with Exame
Brazilians are among the most active users of DeFi platform Pendle, co-founder Dan Wongso revealed. (CoinTelegraph Brasil)
Rodrigo Tolotti of Portal do Bitcoin has a good article explaining Drex’s privacy challenges, with commentary from Marcos Viriato of Parfin and João Gianvecchio of Banco BV.
Brazil has the highest user engagement on cryptocurrency applications of any country in Latin America, a study by data platform Adjust discovered. It studied consumer behavior from January 2022 to April 2024 and found an average duration per user of 6.62 minutes. (Exame) (CoinTelegraph Brasil)
🏛 Policy, Regulation and Enforcement
Investors who lost money in the Braiscompany pyramid should be able to recover their funds, Romualdo Tadeu, director of the Consumer Protection and Defense Program (Procon) in Paraíba, said during an interview with a local radio station. (Portal do Bitcoin)
Authorities are accusing Marlon Gonzalez Motta, aka the “Playboy of Bitcoin”, of faking his kidnapping and robbery. The Public Ministry of the Federal District argued that his alleged kidnappers were actually his clients and that they were paid with the transfer of assets such as an Audi car and a jet ski. (Portal do Bitcoin)
The CVM imposed a R$680,000 fine on Saledo Global, LLC, the company behind Olymp Trade — an offshore forex and crypto brokerage once promoted by Ronaldinho Gaucho that that promised returns of 92%. Otto Eduardo Fonseca de Albuquerque Lobo, CVM director, said in a statement:
“It is concluded that Saledo carried out a public offering of securities to citizens residing in Brazil, without registration or exemption from this with the CVM.” (Portal do Bitcoin)
A Rio de Janeiro court will begin to hear the case of Glaidson Acacio dos Santos (aka Pharaoh of Bitcoins) on Wednesday July 24. The hearing will convene witnesses who were lost money in the investment scheme. (Portal do Bitcoin)
Diego Perez explained the history of ABFintechs in an interview with Portal do Bitcoin
A federal court in Paraíba will auction R$3.9 million (US$700,000) of properties belonging to a money changer who participated in the Braiscompany pyramid. (Portal do Bitcoin)
New proposed legislation looks to strengthen ties between Brazil and bitcoin-friendly El Salvador. (BeinCrypto) (Livecoins)
Federal Police launched Operation Paper Land, executing 18 search and seizure warrants in the state of Goias against a group accused of defrauding Caixa Economica. Police ordered a blocking of the suspects cryptocurrencies. (Livecoins)