Is Paxful Legal in Brazil? Is Paxful Safe?
Choosing a trustworthy cryptocurrency exchange is crucial as it directly impacts the safety and security of your digital assets. The high risk of scams in this area necessitates extreme caution from users.
Our analysts have noticed a growing interest in Paxful services among users in the Brazil. However, questions remain regarding its safety and legal status within the Brazil. Traders Union experts have addressed this concern by crafting a detailed review that explores both the pros and cons of using Paxful.
So, let us tell you if Paxful is allowed in the Brazil and if it's safe to use for trading.
Is Paxful legal in Brazil? Does it have a license?
Paxful is a regulated exchange that provides services in most countries worldwide, except for those under international sanctions, such as North Korea, Iran, Syria, Cuba, and regions like Crimea, Donetsk, and Luhansk. Restrictions may also apply based on requests from local regulators. We compared Paxful's level of regulation with the top two global competitors and the top two competitors available in your country. Exchanges with Tier-1 regulation are generally considered the safest. However, Paxful's safety level is also influenced by other factors outlined below.
| Paxful | Bybit | MEXC | |
|---|---|---|---|
Government-regulated |
Yes |
Yes |
No |
Tier-1 regulation |
Yes |
Yes |
No |
U.S regulation |
Yes |
No |
No |
FCA U.K |
No |
No |
No |
AUSTRAC in Australia |
No |
No |
No |
DFSA in UAE |
No |
No |
No |
AMF in France |
No |
No |
No |
Spain |
No |
No |
No |
Germany |
No |
No |
No |
Singapore |
No |
No |
No |
MFSA in Malta |
No |
No |
No |
Seychelles |
No |
Yes |
No |
Other countries |
Austria’s Financial Market Authority (FMA), Georgia, Kazakhstan |
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Open an account |
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Other Paxful Security Factors to Consider
| Paxful | Bybit | MEXC | |
|---|---|---|---|
2FA |
Yes |
Yes |
Yes |
Verification (KYC) |
Yes |
Yes |
Yes |
Successful hacks |
No |
Yes |
No |
Cold wallet storage |
Yes |
Yes |
Yes |
Investor protection fund |
No |
Yes |
No |
Open an account |
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Short summary about the Paxful exchange
The Paxful exchange is a peer-to-peer trading platform for Bitcoin, Tether, and Ethereum trading instruments. There are over 350 ways to buy and sell these cryptocurrencies. The company has its offices in 21 countries and has almost 5 million active users. A free cryptocurrency wallet, which is provided when registering on the exchange, is among the distinctive features. The security system is based on a safekeeping account, where the funds of the seller and the buyer shall be reserved to avoid the dishonesty of one of the parties.
| 💰 Account currency: | XBT |
| 🚀 Minimum deposit: | $1 |
| ⚖️ Leverage: | No |
| 💱 Spread: | Fixed commission on transactions |
| 🔧 Instruments: | Cryptocurrencies Bitcoin, Tether, and Ethereum are bought/sold for any world currencies |
| 💹 Margin Call / Stop Out: | No |
Paxful Pros and Cons
👍 Paxful Pros:
•minimum registration and verification requirements;
•the platform is fully localized and translated into 21 languages;
•hundreds of tools for cryptocurrencies buying and selling;
•many payment methods, from bank transfers to e-wallets;
•over 12 thousand reliable sellers, as well as buyers;
•free Bitcoin wallet with BitGo is enabled;
•simple and profitable affiliate program.
👎 Paxful Cons:
•there are only three cryptocurrencies on the website which are Bitcoin, Tether, and Ethereum;
•the broker focuses on several regions, such as the USA, Nigeria, China, and India;
•the website provides almost no analytics.
Rules and Regulation
Crypto regulation and licensing in Brazil
In Brazil, the cryptocurrency market operates under the oversight of various regulatory bodies, including the Central Bank of Brazil, the Securities and Exchange Commission of Brazil (CVM), and the National Treasury Secretariat (STN). While cryptocurrency regulations are still evolving, these institutions play crucial roles in supervising and regulating cryptocurrency activities to ensure market integrity and investor protection.
To engage in cryptocurrency-related activities in Brazil, companies must adhere to specific requirements:
- сryptocurrency exchanges and other related entities are required to register with the Central Bank of Brazil and the Securities and Exchange Commission of Brazil (CVM) to operate legally in the country.
- сompliance with anti-money laundering (AML) and know-your-customer (KYC) regulations is mandatory to prevent illicit financial activities and ensure the legitimacy of transactions.
- сryptocurrency firms must implement robust security measures to safeguard users' assets and protect against cyber threats and hacking incidents.
- submission of comprehensive financial reports and compliance with tax regulations are essential for transparency and regulatory adherence.
Investor Protection in Brazil
Several entities in Brazil are engaged in protecting cryptocurrency investors and maintaining market integrity:
- Central Bank of Brazil: Oversees cryptocurrency activities and ensures regulatory compliance to safeguard investor interests.
- Securities and Exchange Commission of Brazil (CVM): Regulates and supervises cryptocurrency trading platforms to maintain fair trading practices and market transparency.
- National Treasury Secretariat (STN): Ensures compliance with tax regulations related to cryptocurrency transactions and income.
- Brazilian Association of Cryptocurrency and Blockchain (ABCB): Represents the interests of cryptocurrency investors and promotes industry standards and best practices.
- Cryptocurrency Investor Protection Program (CIPP): Offers educational resources, support, and assistance to cryptocurrency investors, promoting awareness and responsible investment practices.
These organizations work together to enforce regulations, monitor market activities, combat fraudulent schemes, and provide education and support to cryptocurrency investors in Brazil.
Cryptocurrency Taxation in Brazil
Taxation of cryptocurrency transactions in Brazil is overseen by the National Treasury Secretariat (STN). Income generated from cryptocurrency trading, mining, and other activities is subject to taxation under the Brazilian tax code. Traders and investors are required to accurately report their cryptocurrency income and comply with tax regulations to avoid penalties and ensure regulatory compliance.
Do I recommend using Paxful in the Brazil?
The Paxful cryptocurrency exchange will not be a good choice for traders from Brazil. The company does not hold a license, although the main reason for that is that the financial regulator of the country does not license crypto exchanges in general. There have been security-related incidents on the platform, and the accounts are not protected in the best possible way. Also, users periodically have questions about the quality of the exchange’s operation.
FAQ
Can I work with crypto exchanges considering that they don’t have a license in Brazil?
The fact that a crypto exchange does not have a license doesn’t mean that traders from Brazil will have problems while working with it. Cryptocurrency exchanges are not subject to licensing in many countries, while there are many exchanges with good reputation. Assess the available information about the exchange and check its reputation.
What security methods for account protection do crypto exchanges employ?
Cryptocurrency exchanges may offer various security methods. These include the two-factor authentication, first and foremost, and also such methods as a security question, additional passwords, etc.
Can an exchange that has had a security-related incident in the past be trusted?
You need to check whether such incidents were regular. If it was one episode several years ago, while the reputation of the exchange is good, you can work with such an exchange.
Should I work with an exchange if I have doubts about its reputation?
No. Always choose the cryptocurrency exchanges that have a good reputation.
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Team that worked on the article
Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.