The institution issued a ban on Banco Topazio’s ability to conduct foreign purchases and sales of cryptocurrency assets for two years after detecting irregularities in the due diligence processes for these operations. Additionally, the institution was fined $3.2 million.
As banks enter the cryptocurrency business, regulators are becoming more vigilant on the compliance processes they must follow to conduct these operations safely.
The Administrative Sanctioning Process Decision Committee (Copas) of the Central Bank of Brazil imposed a two-year ban on Banco Topazios’ foreign cryptocurrency trading operations due to irregularities in transactions accounting for billions of dollars.
The committee determined that Banco Topazio disregarded compliance measures between October 2020 and September 2021, when it executed cryptocurrency purchases without executing procedures to determine the qualification of the third parties benefiting from these operations.
Banco Topazio’s trading volume during that period reached $1.7 billion involving 15 legal entities without notifying of atypical operations. Topazio was fined $3.2 million for irregularities in determining customers’ financial capacities, deficiencies in its registration procedures, and failure in determining AML/CFT (Anti-Money Laundering and Terrorist Financing) risks.
