By Brazil Stock Guide – The Brazilian Federation of Banks (Febraban) has announced stricter self-regulatory measures to identify and close fraudulent accounts and those linked to unlicensed online betting platforms. The new framework, effective Friday (25), sets minimum standards for banks to detect and terminate “orange accounts” — legitimate accounts used for illicit activities such as scams and cyberattacks.
According to the news service Broadcast, the initiative also targets “cold accounts,” opened without the knowledge of the alleged owner. Febraban’s president Isaac Sidney described the move as “a milestone in the cleansing process to expel toxic client relationships and identify who is serving crime in the financial sector.”
Stricter oversight and penalties
Banks must now adopt tougher verification policies, refuse suspicious transactions, and promptly close accounts involved in fraudulent activities. They are also required to report such cases to the Central Bank of Brazil, facilitating information sharing among financial institutions.
Febraban’s regulatory department will monitor compliance and may demand proof of enforcement. Sanctions for violations range from formal warnings to expulsion from the self-regulatory framework. “Banks will have to block transactions from clients who rent or sell their accounts or who transfer money to illegal betting sites,” Sidney said.
Illegal betting under scrutiny
The new policy also cracks down on unlicensed betting companies, requiring banks to close accounts of operators lacking authorization from the Secretariat of Prizes and Bets (SPA) under the Ministry of Finance. “Illegal sports betting is a system vulnerability, and 40% of the betting market remains underground,” Sidney noted.
Participating institutions include major lenders such as Banco Bradesco SA (BBDC4.SA), Itaú Unibanco Holding SA (ITUB4.SA), Banco do Brasil SA (BBAS3.SA), Caixa Econômica Federal, Banco Santander Brasil SA (SANB11.SA), and BTG Pactual (BPAC11.SA), among others.
Financial integrity amid digital crime surge
Sidney stressed that both banks and fintechs share the duty to prevent fraudulent account activity. “Opening the financial industry is key to competitiveness, but we cannot compromise system integrity and operational security,” he said.
He added that the financial system faces “unprecedented challenges” amid a surge in digital crimes. “We must close loopholes exploited by criminals in our transaction channels,” he said, emphasizing that mandatory compliance will reinforce market discipline and protect the financial sector from criminal infiltration.