Brazilian Crypto Community Suffers As Compliance Issues Lead To X Being Banned

The Brazilian Supreme Court has mandated that X, the social media platform owned by Elon Musk, be suspended due to the company repeatedly failing to appoint a legal representative within the country. Meanwhile, Brazil has recently attracted attention with its active support for Solana ETFs. The country is set to list its first Solana-based ETF on the B3 exchange, with a second one receiving regulatory approval.

Growing Pains

According to the ruling issued by Justice Alexandre de Moraes, Internet service providers in Brazil, which is home to approximately 215 million people, must block access to X. This decision escalates the ongoing conflict between Musk and the Brazilian government. Earlier this week, X removed its legal representatives in Brazil after Moraes threatened arrest. Moraes then gave X a 24 hour deadline to appoint a new legal representative, which the company did not meet.

The suspension order also includes potential fines for users who try to circumvent the ban using VPNs, with penalties reaching 50,000 reais, or about $8,900, according to BBC. The failure by X to adhere to local regulations and its refusal to remove specific accounts further strained relations, leading to this severe court action.

Impact On The Brazilian Crypto Community

Brazil is a crucial market for X, with around 40 million Brazilian users engaging with the platform each month, as reported by CNN. Since Musk acquired the platform in 2022, it has faced numerous challenges, including a sharp drop in advertising revenue.

This suspension could also significantly impact the burgeoning Brazilian cryptocurrency community. X serves as a vital digital forum for crypto enthusiasts, facilitating discussions, information sharing, and market updates. The ban might disrupt the flow of cryptocurrency news and hinder communication among traders and investors in the region, where interest in digital assets has been growing. Recently, asset management firm BlackRock expanded its Bitcoin and Ethereum ETFs in Brazil, highlighting the importance of this market.