Lemon will shut down its business in Brazil and close about 15,000 local accounts, saying the capital needed to comply with the country’s new crypto licensing framework is too high relative to the size of its operation there.
The company said the move reflects a regulatory and financial calculation rather than weakening demand for crypto services. It plans to redirect capital from Brazil to other Latin American markets where it says its licences, customer base and operating costs offer a stronger foundation for growth.
Exit comes ahead of Brazil’s licensing deadline
Brazil’s framework for virtual-asset service providers took effect on Feb. 2, and companies covered by the rules face an Oct. 30 deadline for the first stage of the licensing process. According to Lemon, providers that keep operating without approval after that point would face restrictions on serving the Brazilian market.
Lemon said meeting the new standards would require it to allocate additional capital to its Brazilian entity. It decided not to make that commitment, arguing that the economics did not make sense given its revenue and customer base in the country. The company did not disclose how much capital would have been required or how much customer money remains on the platform in Brazil.
Customer withdrawals and card cutoff now underway
The immediate focus is the wind-down of customer accounts. Users in Brazil have until Oct. 16 to withdraw their funds, giving them roughly two weeks to act before the first-stage licensing filing deadline for firms seeking to stay in the market.
Lemon also said payments through Lemon Card in Brazil will stop after Sep. 30. The shutdown therefore affects both account balances and day-to-day card use as the company exits the country.
Capital will be redirected to Argentina, Peru and Colombia
Lemon said part of the capital freed up by leaving Brazil will be deployed in Argentina, which it described as offering clear rules and a secure environment for operations. The company presented that market as a more workable setting than Brazil under the new regime.
Peru is another priority for expansion. Lemon said it has more than 1 million users there and holds a licence from the country’s banking supervisor. In Colombia, where it reported more than 150,000 users, the company plans to commit additional resources to its existing operation.
The company described the move as a reallocation within Latin America rather than a broader retreat. Its strategy is to concentrate on markets where existing approvals and scale appear to support further investment more efficiently.
Brazil remains active even as smaller players feel pressure
Lemon’s departure does not suggest Brazil is losing relevance as a crypto market. The country remains one of Latin America’s busiest digital-asset markets, even as tighter licensing rules may weigh more heavily on smaller providers than on larger firms.
Separately, Brazilian lawmakers are considering a proposal for a national Bitcoin reserve that could eventually hold as much as 1 million BTC. The proposal is distinct from the central bank’s licensing process and does not amount to a purchase commitment, but it illustrates how policy discussions around crypto in Brazil are advancing on multiple fronts.
For now, the next confirmed step is Lemon’s withdrawal deadline on Oct. 16, after which its Brazilian operation is set to be fully wound down, with card payments ending earlier on Sep. 30.
Source: crypto.news