Lemon will shut down its Brazilian operations and close roughly 15,000 local accounts after determining that the new crypto licensing capital requirements are too expensive for the company to meet.
Lemon described Brazil’s new capital requirements as “disproportionate” to the scale of its local operations, leading the Argentine crypto app to exit the market instead of funding a licence under the country’s new virtual-asset regulations.
Around 15,000 users still have funds held through Lemon’s Brazilian operation. The company will contact each customer and offer withdrawal support before the remaining accounts are closed on Oct. 16, 2026.
Lemon has already suspended new deposits in Brazilian reais. Lemon Card, a Visa payment card launched with payments infrastructure provider Pomelo just weeks before the closure decision, will stop processing transactions on Sept. 30.
Lemon Exits Brazil Ahead of Crypto Licensing Deadline
Brazil’s regulatory framework for virtual-asset service providers, known locally as PSAVs, came into effect on Feb. 2. Firms subject to the rules must meet an Oct. 30 deadline for the initial phase of the licensing process.
Under Lemon’s description of the framework, providers that operate without regulatory approval beyond the deadline could face restrictions on serving customers in Brazil. To remain compliant, the company would need to allocate additional capital to its Brazilian entity.
Lemon decided to allocate those funds to its operations across other Latin American markets. The company linked the move to the expense of complying with Brazil’s licensing requirements relative to its local customer base and revenue.
“Brazil’s requirements ended up expelling players that wanted to invest, innovate, and widen the service offer,” Lemon said.
The company described the closure as a regulatory and financial move rather than a reaction to weaker demand for crypto services. Lemon did not disclose how much customer money remained in Brazilian accounts or how much capital it would have needed to obtain a licence.
Customer withdrawals have become the company’s immediate focus. Users who keep funds on the platform must withdraw them before the Oct. 16 account closure, which comes two weeks ahead of the first-stage filing deadline for crypto providers seeking to continue operating in Brazil.
Brazil’s Capital Rules Split Local Crypto Providers
Lemon is not the only crypto firm adjusting its Brazilian operations under the new licensing framework. Coinext closed its business after it could not meet the minimum capital requirement, while Digitra discontinued its retail trading services.
The exchange will keep its Brazilian entity but plans to shut down real-denominated accounts on Oct. 25.
Companies with stronger capital positions or established local operations are moving ahead with their expansion plans in Brazil. Binance has received regulatory approval in the country, while Ripple is seeking a Brazilian virtual-asset service provider licence as it broadens the use of its RLUSD stablecoin throughout Latin America.
Coinbase has also widened access to USDC lending products in Brazil through Morpho. The service allows eligible users to participate in onchain lending, making the US exchange one of the international firms that continue to invest in Brazil despite the rising costs of regulatory compliance.
Card products reflect the same contrast in Brazil. Lemon is pulling its Visa card from the market just weeks after its launch, while Binance has brought back its Brazilian crypto card through Mastercard after a two-year absence.
The different approaches force companies to balance potential revenue from Brazilian users against the capital, compliance, and operating expenses required under the new framework. According to Lemon, its 15,000 local accounts did not generate enough value to justify that investment.
For US-based crypto companies, Brazil’s framework adds another market-entry cost rather than altering their obligations at home. American exchanges expanding into Brazil must satisfy local licensing requirements through their Brazilian operations while still complying with relevant US federal and state rules.
Lemon Redirects Capital Across Latin America
Argentina will receive some of the capital freed up by Lemon’s exit from Brazil. Lemon said Argentina offers “clear rules and a security environment,” highlighting the difference between its regulatory conditions and the financial burden of operating under Brazil’s framework.
Bitcoin purchases through Lemon in Argentina have recently climbed to a 20-month high, the company reported. Lemon pointed to the rise as a sign of stronger momentum in its home market, although it did not reveal the purchase volume or total value.
Peru is another key market for Lemon. The company says it has more than 1 million users there and operates under a licence issued by the country’s banking and insurance regulator, the SBS.
In Colombia, where Lemon reports more than 150,000 users, the company plans to allocate more resources to its existing business. The funds will be redirected toward three markets where Lemon sees its current licences, user base, and operating costs as a stronger foundation for future growth.
Other international exchanges are also continuing to expand across Latin American markets beyond Brazil. Bitget secured PSAV registration in Argentina, providing the exchange with a regulated path to serve customers in Lemon’s largest market.
Lemon characterized its regional strategy as a shift in resources rather than a broader withdrawal from Latin America. The company will exit one national market while continuing to operate in Argentina, Peru, and Colombia.
Brazil Continues to Attract Major Crypto Companies
Brazil remains one of Latin America’s busiest cryptocurrency markets despite several smaller providers leaving the country. Lawmakers are weighing a proposal for a national Bitcoin reserve that could eventually hold up to 1 million BTC.
The proposal remains outside the central bank’s licensing framework and does not include any commitment to purchase Bitcoin. Its movement through Congress, however, indicates that Brazilian policymakers are examining potential state exposure to Bitcoin as financial regulators raise requirements for firms serving retail customers.
Brazil’s approach also differs from the US Strategic Bitcoin Reserve created in March 2025. Under the White House framework, the US reserve was funded with Bitcoin seized through criminal or civil proceedings, while officials were allowed to explore ways to acquire additional holdings without affecting the federal budget.
Meanwhile, Lemon’s remaining Brazilian customers have until Oct. 16 to withdraw their funds from the platform, while Lemon Card holders will no longer be able to make payments after Sept. 30.
