Brazil orders CVM audits for crypto; Mexico, EU coordinate on AML

Brazil’s central bank issued Normative Instruction No. 739 on Friday, requiring virtual asset service providers seeking operational licenses to submit independent audits from firms registered with the Comissão de Valores Mobiliários (CVM). The audits, described as “reasonable assurance” reports, must evaluate legal compliance, institutional policies, organizational structure and staff training, along with an internal risk assessment of potential money-laundering and terrorism-financing uses of products and services and procedures for knowing customers.

The requirement applies to exchanges and custodial platforms that need an operational license to operate in Brazil. Regulators said the reports add an independent compliance check to existing registration and reporting obligations for crypto firms operating in the country.

At the 8th Mexico-EU Summit, Mexican President Claudia Sheinbaum and European Commission President Ursula von der Leyen signed a trade deal that includes a €5 billion investment commitment in Mexico. During a summit press briefing, Mexico’s Foreign Minister Roberto Velasco Álvarez noted discussions on joint efforts to counter cross-border crypto money laundering and said, “we have discussed today how criminal organizations are conducting activities on a global scale-such as money laundering-and, of course, matters related to the use of cryptocurrencies for these types of illicit activities.”

U.S. Secretary of State Marco Rubio announced that the United States has designated Comando Vermelho (CV) and Primeiro Comando da Capital (PCC), two of Brazil’s largest criminal groups, as Specially Designated Global Terrorists (SDGTs). Rubio also indicated intent to add the groups to the U.S. Foreign Terrorist Organization (FTO) list beginning June 5. U.S. officials cited the groups’ use of cryptocurrencies to launder proceeds of crime and described them as commanding thousands of members and carrying out attacks against police, public officials and civilians. Brazilian Senator Flavio Bolsonaro had lobbied for tougher measures against the groups.

U.S. officials said the SDGT and planned FTO designations will subject the groups to expanded sanctions and compliance penalties and could restrict their access to international financial and crypto markets.

Regulators and governments in Latin America and the European Union have highlighted concerns about digital assets being used to move illicit proceeds across borders. The Brazilian rule links VASP licensing to audits by CVM-registered firms, while Mexico and the EU are exploring ways to coordinate enforcement and rule-making on crypto-related money laundering. Officials from Mexico and the EU said talks will continue as they work on practical cooperation mechanisms.