Brazil is moving to increase oversight of cryptocurrency transfers involving self-custody wallets as regulators strengthen anti-money laundering and fraud controls.

Under a new rule from the Central Bank of Brazil, transfers worth $10,000 or more to or from self-custody wallets must be reported to the country's Council for Financial Activities Control, known as Coaf, starting October 1. Coaf serves as Brazil's financial intelligence unit, receiving and analyzing reports on financial activity that may warrant further review. The requirement, introduced through Resolution BCB 588, applies to regulated institutions handling virtual assets and treats the $10,000 figure as a reporting trigger rather than a cap on transfers or a prohibition on self-custody. In practice, the reporting duty falls on the institutions, not on individual wallet holders.

Instead of restricting the practice, the measure gives authorities greater visibility into transactions in which users control their own private keys — an arrangement, common across the crypto industry, in which no exchange or intermediary holds the credentials on the user's behalf. Because self-custody wallets can operate without a traditional custodian maintaining transaction records, Brazilian regulators have argued that such transfers provide less information for monitoring and risk assessment.

CoinDesk reported that covered institutions must report qualifying transfers involving self-custody wallets to Coaf. The requirement forms part of Brazil's broader effort to bring crypto activity further into its anti-money laundering and counter-terrorist financing framework, an effort that runs alongside international standards shaped by the Financial Action Task Force, under which regulators worldwide have extended scrutiny to transfers involving self-custody, or "unhosted," wallets.

A Separate 24-Hour Hold for Certain Transfers

Brazil is also introducing a separate precautionary measure that could slow some crypto transfers. Under Resolution BCB 584, transfers above $10,000 destined for self-custody wallets or foreign virtual-asset providers can face a temporary hold of up to 24 hours. The threshold can be triggered by a single transaction or by a customer's total activity during the same day.

The hold rule takes effect January 1, 2027, a later start than the reporting obligation, leaving providers an interval to prepare for the new regime. Providers may release a transfer early after completing a documented risk assessment, and the central bank has described the hold as a precautionary measure rather than a permanent freeze — meaning institutions that want to release funds ahead of the 24-hour window will have to complete such assessments once the mechanism is in force.

The rules also cover stablecoins — tokens pegged to fiat currencies that are widely used for trading and payments — and allow providers to apply additional scrutiny to smaller transactions when their risk controls identify potential fraud concerns.

Brazil's expanding framework illustrates how regulators are working to balance continued access to cryptocurrency with greater visibility into transfers that can move rapidly beyond traditional financial intermediaries.