The president of B3, Gilson Finkelsztain, said in an interview to the Seu Dinheiro portal this Wednesday (3) that Brazilian brokers “have absolutely no regulation” and provoked a quick reaction from the biggest local players.
The executive defended cryptocurrency ETFs as a more efficient way for Brazilian investors to expose themselves to the crypto market than buying the asset directly on exchanges.
In addition to talking about regulation, Finkelsztain stated that in brokers “the operating cost is much, much higher and investor protection is much lower. It costs 50 times more to trade cryptocurrencies than shares. And then they say that the stock market is expensive”.
Brazilian market reaction
The controversial statement by the president of B3 generated reactions in the Brazilian market.
Reinaldo Rabelo, CEO of the Bitcoin Market, the largest national exchange in operation, lamented Finkelsztain's position and pointed out the mistake in the comment that tries to cast doubt on the efficiency of brokers.
“It's a shame that B3 is unaware of the size and strength of the crypto market. In Brazil, and considering all companies in the sector, we already have more clients than the Brazilian stock exchange. The platforms that are in Brazil follow well-defined rules that allow us to maintain our innovation strength, protect investors and offer much lower transaction costs”, said Rabelo to the Bitcoin Portal through the press office.
Rabelo also wrote a post on Linkedin in which he regretted the comment and compared the rates charged by financial products with cryptocurrencies available on B3.
The founder of the BitcoinTrade exchange and current CEO of asset tokenization company Liqi Digital Assets, Daniel Coquieri, told the report that he was positive that big names in the traditional market are keeping an eye on cryptocurrencies, but considered Finkelsztain's provocation to the exchanges as “unnecessary” .
“At the end of the day, what the market complains most is the costs that no longer make sense in operations that no longer have a need to have a centralizer like B3. The market is asking for new technologies that actually make operations more efficient and cheaper for those interested: the owner of the asset and the owner of the money. The rest are all intermediaries who are just biting, and the fewer intermediaries the better,” says Coquieri.
He suggests that the B3 chairman's comment came as an attempt to reassure shareholders concerned about the market shift. As the Seu Dinheiro report pointed out, B3 shares face a 40% drop in 2022 as fears grow that a competitor will soon emerge to take on B3 on the Brazilian stock exchange.
Mexican brokerage Bitso, which is also vying for space in the Brazilian market, said in a note that “regulation is absolutely important for the market to have legal security. This security is essential for cryptocurrencies to function not only as an important investment asset, but in the future, as an effective means of payment for all types of transactions, generating value for society at the most diverse levels”.
Sought, brokers Foxbit and Ripio did not respond until the publication of this report.
Regulation, IN 1888 and numbers
Since 2019, all national exchanges are required to follow RFB Normative Instruction No. 1888 and report customer transactions every month to the Internal Revenue Service.
In addition, platforms operating in Brazil are generally open to dialogue with regulators and, in cases where infringements are suspected, assist in the authorities' investigations .
Although both operations are costly, it is undeniable that it is much simpler for an ordinary investor to open an account on an exchange and trade cryptocurrencies for free than to buy a share of crypto ETF on B3.
Even though each exchange has its own way of charging fees depending on the service offered, most will only charge fees at the time of withdrawal from the investor.
In the case of the ETF, fund administrators will charge administration fees that can reach 1.3% per year, in addition to a fee of up to 5.5% for the creation of a new quota.
In addition, it is necessary to take into account the tax issue. ETFs have the famous “come-cotas” , which takes part of the gains even when there is no sale of the asset, since the investor does not have income tax exemption.
In the direct purchase of cryptocurrencies in an exchange, the taxpayer will only need to pay investment tax if the sales (sales) exceed R$35,000 per month.
The post CEO of B3 attacks cryptocurrency brokers, and the Brazilian market reacts first appeared in Portal do Bitcoin .