Contrasting Crypto Regulation: A look at the US and Brazil

In our practice serving cryptocurrency firms across dozens of jurisdictions, we're witnessing contrasting regulatory approaches between two major economies that illustrate the complex compliance landscape facing global operators. The Trump administration's dismantling of enforcement policies put in place by earlier administrations stands in sharp relief against Brazil's consultative approach toward comprehensive crypto regulation. This contrast between permissive deregulation and structured oversight offers valuable lessons for cross-border compliance strategies.

The Regulatory Contrast

In Washington, Deputy Attorney General Todd Blanche's recent memo directs prosecutors to avoid charging regulatory violations unless there's clear intent and knowledge—effectively ending the "regulation by enforcement" era. The SEC has dropped major lawsuits against Ripple, Binance, and Coinbase, signalling a dramatic shift toward industry accommodation. Across all regulatory and enforcement agencies, the US is shifting its focus towards innovation and growth, with federal agencies directing enforcement and oversight resources towards consumer protection and groups (particularly Transnational Criminal Organizations) abusing cryptocurrency platforms.

Meanwhile, in Brasília, Brazil's Central Bank is moving full speed ahead with VASP licensing requirements and stablecoin oversight. With 90% of Brazil's crypto transactions involving stablecoins, regulators are stepping up. The Virtual Assets Act implementation continues through phased public consultations, creating a comprehensive regulatory framework while the US retreats from oversight.

The Stablecoin Significance

Brazil's stablecoin focus reveals a structured consultative approach to regulatory thinking and phased implementation which contrasts sharply with the US reframing to lighter touch regulation. While the US has recently passed the GENIUS act to create a clear regulatory framework for stablecoins, Brazilian regulators recognize that stablecoins represent the actual infrastructure of their crypto economy. The Central Bank has flagged systemic risks posed by unregulated stablecoin use and is preparing formal oversight mechanisms (see speech by Deputy Governor of the Central Bank of Brazil, 20 May 2025).

This approach reflects fundamentally different views of crypto's role in national financial systems. The US is betting on industry self-regulation and market forces. Brazil is building comprehensive oversight that treats cryptocurrency as integral to national financial infrastructure.

Practical Implications for Global Operations

This regulatory contrast creates three critical risk categories that global firms must navigate:

• Regulatory Risk: The US policy shift may reduce compliance burdens domestically, but complexity across borders only increases. Companies operating across both jurisdictions face the challenge of maintaining robust compliance frameworks for Brazil while adapting to changing oversight in the US.
• Financial Crime Risk Divergence: While US enforcement scales back, Brazil's emphasis on fraud investigations and links to criminal organizations intensifies AML/CFT obligations. The Travel Rule enforcement varies dramatically between jurisdictions, creating operational gaps. Brazilian authorities require more granular transaction monitoring and suspicious activity reporting than the increasingly flexible US approach demands.
• Rapid Evolution: The pace of change across jurisdictions demands agile compliance systems. Brazil's monthly regulatory updates through public consultations, combined with the US administration's ongoing policy reversals, create an environment where compliance frameworks can become obsolete within quarters. Firms must build adaptive risk management systems capable of responding to accelerated regulatory change while maintaining operational stability across markets with fundamentally different oversight philosophies.

Building a crypto-specific AML compliance and investigations program

A key consideration when creating a crypto-specific AML program is to design a framework tailored to the unique characteristics of digital assets and blockchain technology. Unlike traditional financial institutions, which often rely on centralized banking controls and predictable transaction patterns, crypto firms face additional risks which require enhanced monitoring and risk management. Such risks include pseudonymous transactions, decentralized networks, and rapid cross-border transfers.

The standard compliance program principles remain: for example, risk assessments tailored to regulatory guidance, refreshing policy and procedures to address the inherent risks, and maintaining robust CDD and EDD procedures. However, in the evolving crypto space, certain features become more important, such as:

• ensuring compliance and investigations teams understand emerging threats.

• equipping and empowering independent testing and audit teams to address and report on any identified control weaknesses.

• regular updates to transaction monitoring thresholds and parameters to meet evolving regulatory guidance and enforcement activity.

• introducing horizon scanning to monitor upcoming regulatory changes across your various operating jurisdictions and gap analysis to identify divergence between global and regional requirements, such as can be evidenced in the inconsistent implementation of the Travel Rule.

Looking Ahead

The regulatory divergence between the US and Brazil represents more than policy differences—it signals competing visions for cryptocurrency's role in the global financial system. For compliance professionals managing global operations, this moment demands strategic thinking about regulatory architecture that can accommodate both permissive and structured oversight regimes.

The rules governing cryptocurrency transactions, investigations, and enforcement are fragmenting along philosophical lines. Success will require understanding not just what regulations say, but how different regulatory philosophies shape compliance expectations across multiple markets. The US-Brazil split offers a case study in navigating this new reality.

^{To explore this dynamic further, join our webinar "Cross-border Crypto Compliance & Investigations: A Brazilian Perspective" on September 17th, featuring our global investigations team and Brazilian legal specialists from Maeda Ayres Sarubbi. We'll share practical strategies for navigating complex regulatory landscapes with real case studies from our international practice. Register here.}

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