#155: Banned: X is blocked in Brazil amid Musk vs Moraes censorship fight

Plus: world's first Solana ETF launches in Brazil; Galipolo named as next Central Bank president

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Olá pessoal!

Welcome back to ????Brazil Crypto Report for the week of August 26-30.

I’m sure you’ve probably seen the news by now that X, the platform formerly known as Twitter, has been banned in Brazil after Elon Musk refused to abide by an order to censor political opponents of Supreme Court justice Alexandre de Moraes.

Instead, of following Moraes’ orders, Musk took to X to call him a dictator and compared him to Lord Voldemort from Harry Potter. Not exactly a peaceful resolution.

This is what I saw Saturday morning when I tried logging into X??

Why not just use a VPN? Well, as it turns out, individuals who try to circumvent the X ban by using a VPN are subject to a fine of R$50,000 (~US$9,000) PER DAY. I have no idea if/how this can actually be enforced at scale, but the potential fine is obviously enough to deter.

This is obviously problematic for Brazil’s crypto community because, for all of its flaws, X is still crypto’s town square. It’s the singular best platform for learning about what’s going on, new developments, controversies, understanding who the players are and what the narratives are, etc. It’s where dirty laundry gets aired, and where consensus is reached. Losing access to X for an extended period will undoubtedly be detrimental to Brazil’s crypto scene, which is a huge shame.

??What’s in BCR this week?

• World’s first Solana ETF raises R$15.5 million its public offering
• BlackRock lists its Ethereum ETF on Brazil’s B3 exchange
• Lula nominates Gabriel Muricca Galípolo to succeed Roberto Campos Neto as Central Bank president

Also, if you’re not signed up already you should definitely check out Ripio’s Modular Summit event in S?o Paulo on September 12. They’ll have speakers from Lightspark, Paxos, Circle and more. It’s shaping up to be a great event so make sure you stop by if you can!

Thanks for reading and have a great week!

-AWS

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World’s first Solana ETF raises R$15.5 million its public offering

The QSOL11 Solana ETF issued by QR Asset Management raised R$15.5 million (US$3 million) in its initial offering on August 29 after being approved by the CVM , Brazil’s securities regulator, earlier in the month.

The product is the world’s first Solana specific exchange traded fund and is now available for trading on the B3 exchange.

Murilo Cortina , commercial director at QR Asset, said the product has strong potential in the market:

“It is interesting to note that QSOL11 raised approximately 15% of what we raised with QBTC11, the first Bitcoin ETF in Latin America. Solana currently has approximately 6% of Bitcoin’s market size, which indicates that even smaller assets, such as Solana, still have significant demand in the market. However, unlike Bitcoin, Solana still has a lot of room to grow and has been increasing its share of the crypto asset market,”

Theodoro Fleury, CFA , chief investment officer at QR Asset, said:

“An ETF like QSOL11 goes through a rigorous approval process by CVM and B3. This provides greater security, especially for more conservative and institutional investors who do not have the possibility of buying the assets directly.”

BlockTrends CriptoFacil Portal do Bitcoin CoinTelegraph Brasil Valor

BlackRock lists Ethereum ETF on B3

The world’s largest asset manager listed shares of its iShares Ethereum Trust (ETHA) on the B3 exchange.

The ETF now trades under ticker symbol ETHA39 as Brazilian depositary receipt (BDR), which represents shares of foreign companies traded locally. One share of ETHA39 will be equivalent to one-third of an ETHA share and is available to qualified and retails investors for a minimum investment of between R$45 and R$50.

The BDR will have an administration fee of 0.25%.

Nicolas Gomez, BlackRock’s head of ETFs, index investments and products for Latin America, said in a statement:

“The launch of ETHA39 now allows investors to have access to the two largest cryptocurrencies by market capitalization.”

Cristiano Monteiro de Castro , BlackRock’s director in Brazil, said:

Over time, BlackRock realized that, given the growing demand from clients, it was necessary to institutionalize digital issues on a global scale.

CoinDesk Valor CoinTelegraph Brasil Portal do Bitcoin CriptoFacil Exame

Lula nominates Galipolo as next Central Bank president

President Lula has formally nominated Gabriel Galipolo to replace Roberto Campos Neto as president of the Central Bank.

Galipolo currently holds the position of Director of Monetary Policy at the bank and serves on COPOM, the committee that dictates interest rate decisions. He will need to be approved by the Senate Economic Affairs Committee before officially replacing Campos Neto at the end of the year.

Galipolo’s views toward cryptocurrency and bank’s innovation agenda (including Drex) appear to be mixed. While he appears to be bullish on tokenization and the potential of blockchain technology, he has expressed skepticism about Drex in his few public remarks about the topic, calling the project’s roadblocks “challenging” earlier this year:

"Not even the largest companies in the world in the technology sector were able to offer [solutions] in a way that would be adequate.”

Financial institutions interviewed by Jo?o Pedro Malar Massa of Exame were optimistic about the pick. Andre Portilho , head of digital assets at BTG Pactual , said:

“We believe that the future president of the Central Bank will continue this project, given its importance for the development and evolution of the Brazilian market."

Bruno Salles , head of product at Evertec + Sinqia , added:

“Our main expectation is that the speed and cadence of the Pix and Drex projects will be resumed. Recently, both projects have been hampered in terms of focus and deliveries.”

Andre Carneiro of BBChain explained:

“In a scenario where innovation is crucial, the presence of a strong and visionary leadership like Galípolo's is fundamental. He can lead initiatives that promote trust and adoption of Drex.”

It goes without saying that all of these executives represent entities linked to the Drex project and don’t have any incentive to say anything negative about the appointment, but these are all positive indications nevertheless.

CoinTelegraph Brasil Portal do Bitcoin Exame

??Brazil Crypto News Rundown

?? Markets

• Brazil’s crypto ETFs had 230,000 total shareholders at the end of July 2024, with daily transactions exceeding 16,000 and daily financial turnover of R$49 million (US$8.7 million). (Valor)
• Brazilians have purchased US$10.79 billion worth of cryptocurrency thus far in 2024, according to data released by the Central Bank. (Portal do Bitcoin) (CoinTelegraph Brasil)
• Brazilians contributed inflows of R$44 million (US$8 million) to crypto funds during the week of August 19-23. (CoinTelegraph Brasil)
• The B3 exchange announced that it intends to launch Ethereum futures contracts in 2025. (CoinTelegraph Brasil) (CriptoFacil) (InfoMoney)
• Resistance on the part of notary offices is holding up the advancement of real estate tokenization in Brazil, argues Eduardo Carvalho of Dynasty Global . (BeinCrypto)
• 42% of Brazilians still have reservations about investing in cryptocurrency due to doubts about the security of their funds, according to a new survey by Sherlock Communications . (CoinTelegraph Brasil) (Portal do Bitcoin) (BeinCrypto)
• BRLA Digital announced a new BRLA-USDC liquidity pool on the Moonbeam Network . (CoinTelegraph Brasil)
• RWA platform Ribus launched a real estate tokenization protocol consisting of two products: Ribus Key and Ribus Share. (CoinTelegraph Brasil)

?? Adoption

• Drex is likely to achieve the same level of mainstream adoption and success as Pix, said Fabio Araujo, Drex coordinator at the Central Bank. He also revealed that the likely launch date for the project would be at the end of 2025:

Pix really raised the bar. It was impressive; no one imagined it would be so successful. Many people ask me if Drex will achieve the same success as Pix. I believe that nothing will have the same success as Pix, because no one predicted it would be so successful. Of course, we are working to reach the population and generate confidence in the use of Drex, but if we manage to reach the level of Pix, it will be a big surprise." (CoinTelegraph Brasil)

• Offline payments, tokenization of RWAs, asset fractionalization and privacy solutions are among the 42 use case proposals presented by the 16 consortia in the Drex pilot. (CoinTelegraph Brasil) (Valor)
• Roberto Campos Neto reiterated his belief in Drex and a tokenized financial system during remarks at the ExpertXP conference. He argued that tokenization will increase capital markets efficiency for three reasons:

“First, because the cost of the registered contract is cheaper; second, because divisibility is immediate; and third, because real-time transparency is very high”. (Portal do Bitcoin)

• Paul Brody , EY’s global blockchain leader, discussed the progress and challenges of blockchain adoption inside companies on a recent visit to Brazil. (Exame)
• Serpro and Banrisul launched a new blockchain that provides a secure and scalable environment for publishing smart contracts on the Drex platform. (Livecoins)
• The Brazilian National Agency of Petroleum, Natural Gas and Biofuels is looking for startups in blockchain and artificial intelligence with solutions to improve the energy sector. (Livecoins)
• A new BRICS payment system that involves the creation of a digital currency is in an advanced stage of testing. (Livecoins)
• A new Anatel study shows that only 30% of Brazilians have basic digital skills. (CoinTelegraph Brasil)
• Brazilian economist Paulo Kogos argued that bitcoin is a good “hedge against the government’s greed”, particularly in cases of confiscation or inflation. (Livecoins)
• The Central Bank of Brazil is sending an employee to a bitcoin conference in El Salvador. (BlockTrends) (Livecoins)
• Bitcoiner and libertarian YouTuber Raphael Lima is running for Sao Paulo city council. (Livecoins)
• 另维Gala Wen , chief development officer at BNB Chain, talked to CoinTelegraph Brasil about the future of the network. (CoinTelegraph Brasil)
• Tether is doing a mapping of crypto projects in Brazil and is interested in your feedback.
• Juliana Schlesinger Felippe , formerly of Paxos , has joined Transfero Group as chief revenue officer

?? Policy, Regulation and Enforcement

• Binance users in Brazil are still able to access the exchange’s derivatives trading platform by changing the interface language from Brazilian Portuguese to Portuguese from Portugal, Portal do Bitcoin reports. Upon switching language, the reporter was presented with a message saying that user understands that they are aware that the product they are using may be illegal in Brazil. Recall that Binance reached a settlement with the CVM earlier this month to resolve an investigation into its irregular derivatives offering.
• Binance officials met with the Central Bank on August 27. Binance representatives included VP of Latin America Guilherme Nazar , Thiago Sarandy and Renan Cruvinel, CAMS from its compliance team, and Fernando Mirandez D.N. Gomes and Fern?o Mesquita of Pinheiro Neto Advogados . (Livecoins)
• The second half of 2024 will be busy on the crypto regulatory front, with the Central Bank finalizing its regulatory framework, the CVM looking into asset tokenization and Congress considering a bill that would require asset segregation. (Exame)
• President Lula criticized the privatization of strategic sectors and applauded Telebras’ leadership in the development of Brazilian artificial intelligence. He said:

“There are things that must inexorably be the responsibility of the State. It is like this in Germany, France and the United States. Many people in this country were led by the famous theory that the market must be opened to everyone; that the important thing is free access to trade. But free access to trade is when it is to sell their product here. When it is for us to sell abroad what we produce here, we know how difficult it is.” (CoinTelegraph Brasil)

• A cryptocurrency pyramid scheme operator that used Ronaldinho Gaucho’s likeness was arrested in Turkey. (BlockTrends)
• Federal Police launched Operation Concierge to dismantle a criminal organization accused of moving US$7.5 billion (R$1.3 billion) through the accounts of two illegal fintechs — Campinas - T10 and InovePay. (BlockNews) (BlockTrends)
• Civil Police in the state of Sergipe indicted two individuals behind a crypto pyramid scheme that resulted in R$60 million in losses to investors. (Portal do Bitcoin)
• Leonardo Avalanche, president of the PRTB political party, was sued by a Federal Police officer of charges of stealing 14.5 bitcoins at the beginning of this year. (Portal do Bitcoin)
• Mercado Bitcoin was ordered to return 0.88 bitcoins to a client who had his account hacked and funds stolen. (Livecoins)
• Congresswoman Julia Zanatta presented a bill to prohibit the digital real/Drex from replacing paper money. (Livecoins)
• Luiz Thomaz Luizinho (Avante), a candidate for city council in Niteroi declared R$10.16 worth of financial assets, R$10 of which are in Ethereum. (Portal do Bitcoin)
• A Sao Paulo court ordered FTX to block assets belonging to Xland, a crypto pyramid associated with footballer Willian “Bigode”. (Portal do Bitcoin)
• ABcripto - Associa??o Brasileira de Criptoeconomia is forming the CVM’s educational advisory committee, with the goal of promoting cryptocurrency and other financial education projects. (CoinTelegraph Brasil) (Livecoins) (BeinCrypto) (CriptoFacil)
• Bitcoin skeptic Tiago Reis and 800 others had their financial advisor authorizations suspended by the CVM for failing to submit required paperwork. (Portal do Bitcoin) (BeinCrypto)
• The CVM is issued a R$5.8 million judgement against Wemake, a crypto pyramid that promised 5-10% monthly returns. (Portal do Bitcoin) (Livecoins)
• Francisco Zanicotti, the attorney general for the Public Ministry of Parana, said that “We must build barriers against cybercrimes, including those involving cryptocurrencies.” (Livecoins)
• Interpol will train Brazilian law enforcement members on cybercrimes and cryptocurrency matters. (Livecoins)