Brazil Presses Banco Central to Speed Fintech Oversight After Laundering Findings

Overview

• Finance Minister Dario Durigan publicly called on the Banco Central on Thursday to bring forward its supervision schedule for fintechs to strengthen enforcement against money laundering.
• About one and a half weeks before July 9 the government notified 37 fintechs to block flagged accounts and transfer the blocked funds to the Fundo Nacional de Segurança Pública under existing law.
• Durigan cited investigations by Receita Federal and Coaf that found many fintechs were being used by organized crime to launder money and to receive proceeds from illegal betting operators.
• The minister blamed gaps in oversight on the prior Banco Central leadership under Roberto Campos Neto, singled out the Banco Master scandal as originating then, and said enforcement will continue during the electoral period.
• The Conselho Monetário Nacional and Banco Central are drafting new rules and taking supervisory steps that could mean closer monitoring of licensed fintechs, more freezes of suspect flows, and sharper scrutiny of payments and account controls.