Web3 Reg News: Increasing Surveillance and International Oversight

• Continuing Regulatory Uncertainty

Senate Blocks Landmark CLARITY Act 

The US Senate has failed to advance the Digital Asset Market CLARITY Act, falling short of the 60 votes required to clear a key procedural hurdle. The cloture motion was narrowly defeated by a vote of 49 to 50, effectively killing the bill's chances of passing before the November midterm elections. Despite extensive negotiations that resulted in 126 amendments, including strict new ethics rules and decentralized finance (DeFi) adjustments, partisan divisions proved insurmountable. The failure of this comprehensive market structure bill deals a significant blow to the US digital asset industry, ensuring that market oversight and token classifications will remain dependent on agency actions from the SEC and CFTC rather than a durable statutory framework.

• Capital Controls and Compliance

Brazil Bans Stablecoins for Cross-Border Payments 

Brazil's Central Bank has tightened its oversight of digital assets with the publication of Resolution BCB No. 561. Set to take effect in October 2026, the new regulation explicitly bans electronic foreign exchange providers from using stablecoins and cryptocurrencies to settle cross-border payments through regulated channels. While licensed virtual asset service providers can still utilize stablecoins under a separate framework, the ban disrupts companies that had integrated stablecoin settlements into traditional overseas payment flows. This shift signals a cautious regulatory stance aimed at preserving the integrity of Brazil's domestic financial rails against unregulated offshore stablecoin liquidity.

Jamaica Advances Virtual Assets Service Providers Act 

Jamaica's House of Representatives began reviewing the Virtual Assets Service Providers Act in late September, establishing a rigid licensing framework for cryptocurrency firms. The bill mandates that any business offering virtual asset services to Jamaican consumers must obtain a license from the Financial Services Commission (FSC), regardless of its physical headquarters. Licensed entities will be brought under the country’s existing anti-money laundering and counter-terrorism financing laws. Lawmakers clarified that the legislation does not recognize crypto as legal tender, framing the bill as a necessary step to monitor the sector and grant the FSC explicit authority to shut down non-compliant, unlicensed operations.

• Increasing Surveillance

Argentina Commits to Global Crypto Data Sharing 

In a major pivot toward global tax transparency, Argentina has formally committed to adopting the OECD's Crypto-Asset Reporting Framework (CARF). By September 2029, the nation will initiate automatic, cross-border tax data sharing. Under the new regime, crypto exchanges and service providers will be required to collect and report detailed user identification and transaction data. This will empower Argentina's tax agency, ARCA, to compare citizens' offshore crypto activities directly against their local tax filings, closing significant loopholes for tax evasion without introducing new crypto-specific levies.

Bulgaria Grants Tax Officials Full Crypto Data Access 

Aligning with the European Union's DAC8 directive, Bulgaria has passed legislation mandating that all crypto service providers report exhaustive user data to the National Revenue Agency. Starting in 2027, regulated crypto platforms operating in Bulgaria must supply detailed customer identification and transaction information covering purchases, sales, and exchanges. Notably, the law targets decentralized activities by explicitly requiring platforms to report external withdrawals sent to self-custody wallets. This establishes a comprehensive level of tax surveillance and traceability over individual digital asset movements within the country.