The Brazil crypto market is heading into a decisive regulatory stretch, and a surprisingly large number of companies may not make it to the other side.
Industry estimates cited by Valor Investe suggest that fewer than 10% of crypto businesses operating in the country are likely to seek authorization from Brazil’s Central Bank before the October deadline. Depending on the estimate, between 150 and 300 domestic and foreign companies currently provide virtual asset services in Brazil. Only around 20 to 25 are expected to have the capital, infrastructure or appetite to apply.
The number that ultimately secures authorization could be closer to 10.
The figures are unofficial for now. The real count will only become visible after the initial application window closes on October 30. Companies that were already providing virtual asset services before the new rules took effect in February must file the first stage of their authorization request by that date. Those that do not will have another 30 days to shut down their operations.
Not every player needs a new license. Financial institutions that already hold a Central Bank banking authorization are exempt from obtaining a separate one for crypto services, while investment fund managers remain under the supervision of Brazil’s Securities and Exchange Commission, or CVM.
Still, the rules are already reshaping who wants to compete.
Brazil crypto market is getting smaller before it gets more regulated
Several familiar names have already changed course.
Bitnuvem closed its Brazilian business this year, pointing to rising operating costs and regulatory requirements. NovaDAX exited in June, allowing customers to move their accounts to Foxbit. Digitra.com later shut its retail operation and also directed customers to Foxbit.
BTG Pactual took a different route, folding its Mynt crypto platform into the bank’s existing structure. That move effectively placed the group’s digital asset business inside an institution that already sits within the Central Bank’s regulatory framework.
Bitso also revamped its Brazilian retail strategy in early September. Instead of continuing to serve retail investors directly, the company partnered with Mercado Bitcoin and is now focusing its local operation on infrastructure and institutional services.
Coinext became another high-profile departure. After almost a decade, it announced plans to close its retail operation and end crypto trading and custody services for those customers. Its institutional asset management business, Coinext Asset, will continue.
Unlike some earlier exits, Coinext explicitly pointed to the new regulatory environment as a factor in its decision. The company said it reviewed the requirements, spoke with potential partners and considered alternatives, but ultimately found no workable path forward.
More customer transfers could still emerge before the transition period ends, according to industry participants cited by Valor Investe.
One reason is sitting in the numbers.
The Central Bank initially floated much lower minimum capital requirements during Public Consultation 109/2024: R$1 million for virtual asset intermediaries such as exchanges, R$2 million for custodians and R$3 million for brokers combining both activities.
The final framework, announced in November, raised the bar substantially. Depending on the services provided and the institution’s risk profile, required capital can now range from R$10.8 million to R$37.2 million.
Money is only part of the test. Applicants also face requirements covering governance, internal controls, risk management, cybersecurity, anti-money laundering systems, technical certification, independent audits and ongoing regulatory reporting.
And the compliance bill is still growing.
A separate set of capital and risk rules approved in July begins taking effect in January 2027. Virtual asset service providers will eventually move into the S4 regulatory segment by June 2028, while smaller S5 institutions will no longer be allowed to offer virtual asset services.
Applicants and licensees must also provide independent audit reports covering areas such as anti-money laundering controls, segregation of customer assets, internal risk systems and employee compliance programs.
From January 1, 2027, licensed exchanges will face another operational requirement: daily reports demonstrating that they hold enough assets to cover operational and security risks.
For smaller businesses, that creates a familiar problem in regulated finance: compliance can be manageable in principle while becoming expensive in practice.
The real fight is over who gets to stay
Not everyone in the Brazil crypto market is resisting tougher oversight.
One executive cited by Valor Investe argued that compliance is simply part of operating in a regulated industry, saying, “regulation is not something you cry about, you comply with it.”
The executive also argued that clearer rules and Central Bank supervision are necessary for the sector to mature. The concern is calibration: requirements designed to remove weak operators could also push out smaller companies that cannot absorb the cost of compliance.
Ripple’s Latin America public policy and regulatory director, Isabel Sica Longhi, made a similar distinction.
She argued that some reduction in the number of crypto firms is a normal consequence of regulation, but warned against excluding businesses merely because they are small.
“The thinning of the market is natural and should happen anyway,” Longhi said, according to Valor Investe. “What is not natural, if it happens, is preventing the market from existing and removing small participants simply because they are small participants.”
That tension is becoming more visible as Brazil’s biggest financial institutions push deeper into digital assets.
Itaú, Bradesco, Santander, Banco do Brasil and Nubank have expanded their crypto offerings since 2025, even as Central Bank filings from March showed that the banks themselves held no virtual assets on their balance sheets.
Nubank was offering 28 digital assets to more than 7 million crypto customers, while Itaú offered 15 assets through its investment platform.
Meanwhile, Mercado Bitcoin continues to expand. Tether invested $20 million in the company in July through a strategic financing round focused on tokenized assets, payments, lending and onchain capital markets. Mercado Bitcoin said it had 4.5 million users and had issued more than R$2 billion in tokenized assets.
The Brazil crypto market is therefore not simply shrinking. It is being reorganized around companies with more capital, broader infrastructure and stronger ties to regulated finance.
Security is another major reason behind the Central Bank’s approach.
In August, the regulator introduced rules requiring certain crypto transfers above $10,000 to foreign virtual asset providers or self-custody wallets to be held for up to 24 hours starting January 1, 2027. Providers can release funds sooner after completing the required risk assessment.
The Central Bank has also been developing a real-time crypto threat alert system with Hypernative after attackers converted part of the proceeds from a major cyberattack into cryptocurrency. Foxbit and Mercado Bitcoin were among the firms preparing to participate in the monitoring network.
By October 30, the industry will have a much clearer picture of who is willing and able to stay.
Until then, the most visible signs may come from the exits: more closures, customer migrations, partnerships and mergers as companies decide whether to pay for their own authorization or find a place inside someone else’s regulatory umbrella.