Privacy at risk? Increased tracking of Bitcoin in Brazil puts users at a crossroads.

Source: PortaldoBitcoin Original Title: Privacy at Risk? Increased Bitcoin Tracking in Brazil Puts Users at a Crossroads Original Link: Crypto market experts were direct on stage at the Blockchain Conference Brazil this Saturday (29): the Brazilian government has already managed to track Bitcoin with relative ease and is working to further expand its oversight power.

The federal prosecutor Alexandre Senra opened the discussion by showing how public cases, such as the GAS Consultoria scam led by the “Pharaoh of Bitcoin”, can be easily traced on the blockchain. He showed how the pyramid scheme operator still controls a wallet with 1,300 BTC ( equivalent to R$ 630 million ) and that, in January of this year, he sent 24 BTC to a deposit wallet of the exchange.

According to him, although the State cannot seize bitcoins without access to the private keys, it is possible to monitor addresses and be alerted when there are significant movements, such as sending to a centralized entity, like an exchange, and from that, demand the seizure of the amounts.

The government's ability to track cryptocurrency transactions is expected to increase significantly next year, as the new rules from the Central Bank for the crypto sector require, for example, that exchanges report users' self-custody wallets.

The negative side of crypto tracking

In Marcello Paz's view, from PRO Hash, the increase in state control over the crypto market requires a choice from users: to provide the information that the government demands, dealing with the risk of having their data exposed in a potential leak, or to remain off the radar, without interacting with centralized entities or declaring transactions, assuming the risk of being caught and fined.

Although contradictory, he advocates the second option. “If the State knows how much we have, where it is, and how it is safeguarded, this turns us into walking targets,” he stated. “I have no doubt that this information about crypto wallets will leak and fall into the hands of those who shouldn't have it.”

He also pointed out the contradiction in the fact that Drex — the Central Bank's digital currency project — was halted precisely because the government itself could not ensure the privacy of users' transactions.

Ismael Decol, from Declare Cripto, shared the view that “the net is tightening,” citing the new regulatory instruction from the Federal Revenue, now called DeCripto, which is expected to make declarations more complete and frequent.

But it warned that, although failing to declare cryptocurrencies is not a crime in itself, it constitutes a tax offense. Deliberately lying about amounts or personal data is even more serious and may constitute the crime of ideological falsehood.

The good side of tracking

Caio Motta from Chainalysis presented data from the company indicating that only 0.14% of cryptocurrency transactions identified in 2024 were linked to illicit activities.

For him, this number, although small compared to the size of the industry, should not be used as an argument to dismiss tracking mechanisms. On the contrary, it is precisely monitoring that helps preserve the integrity of the market and protect people in real situations of vulnerability.

He cited an emblematic case to illustrate this point: a mother who sold explicit content of her own daughter and ended up being caught precisely because of the efficient tracking of transactions in crypto. For Motta, episodes like this show that the transparency of blockchain is an essential tool in combating serious crimes.

In conclusion, the overall feeling was that there are no easy answers. The government is already tracking cryptocurrencies accurately while requiring more data from users. However, it does not provide security guarantees that this data collection will not put lives at risk.

Between declaring or preserving one's own privacy, users find themselves forced to choose which risk they prefer to face. As Marcello summed up: “If you declare, there is a risk. If you don't declare, there are other risks. We have to choose which battle to fight.”