Key conclusions
- On Monday, the MPF confirmed a ban on crypto donations, protecting Brazil’s election market from fraud.
- According to the court order dated December 17, 2019, candidates must use Pix or traditional banking to verify 100% of the funds.
- Brazil allows digital crowdfunding from May 15, but forces political campaigns to register the IDs of all donors.
Brazilian prosecutors reiterate ban on crypto-political donations ahead of presidential election
As a general elections In Brazil, the Public Prosecutor’s Office (MPF), which is responsible for campaign fundraising and election expenses, is stepping up its vigilance on political donations.
On Monday, the office released an article confirming the previous ban cryptocurrency political donations, explaining the reasons for this ban.
The office said the path to financial donations to the election campaign in Brazil is limited, as control authorities must verify the origin of the funds corresponding to each donation.
That’s why cryptocurrency donations are prohibited as this task may be difficult due to the pseudonymous nature of these transactions.
“All donations to the campaign must be identified. They can be made through bank transactions with the CPF (Brazilian Taxpayer Identification Number) identification of the donor. It is also possible to donate through Pix (Brazil’s instant payment system). In all cases, the party and candidate must report and acknowledge donations received in their campaign finance report.” this emphasized.
The office distinguished virtual currency from virtual crowdfunding. It emphasizes that collecting money online to finance political campaigns is allowed, provided the donors are properly identified. This type of funding has been approved since 2017, when the Electoral Act was reformed, and has been permitted since May 15 of each election year.
In addition, the office clarified that candidates who fail to prove the origin of their campaign funds or disclose any donations may be fined and must return these funds to the Treasury, risking liability for abuse of economic power.
The ban was imposed by the Supreme Electoral Court in Resolution No. 23,607 and issued On December 17, 2019, the document excluded candidates and political parties from receiving financial donations in virtual currency.
