Brazil’s Supreme Court Threatens to Ban X (Twitter), Impact on Crypto Investors Looms

As X has become a critical platform for real-time market updates and crypto discussions, the potential ban presents a significant challenge for investors relying on the platform for information and market insights.

Brazil's Legal Showdown with X: A Clash Over Compliance and Free Speech

The conflict between X and Brazil's Supreme Federal Court (STF), represented by Minister Alexandre de Moraes, escalated earlier this week after the platform removed its legal representatives from Brazil due to Moraes' threat of arrest. Following X's decision, Moraes gave a 24-hour deadline to appoint a new representative.

De Moraes' order is based on the Internet Civil Rights Framework, which mandates that international companies operating in Brazil maintain local legal representation. However, tech tycoon Elon Musk, owner of X, has refused to comply and decided to close its office in Brazil instead. The decision came in response to what Musk described as untenable demands from the court, including censorship and privacy concerns.

Brazil had comparable cases in the past. For instance, in 2023, instant messaging platform Telegram faced a temporary ban in Brazil under similar circumstances. Additionally, Brazilian judges shut down Meta's messaging app, WhatsApp, several times in 2015 and 2016 because the company refused to comply with police requests for user data.

However, the case of X is more complex due to the platform's global influence and Musk's public commitment to free speech. Brazilian legal expert Larissa Pigão, who specializes in Digital Law and Personal Data Protection, emphasizes the necessity of adhering to local regulations. She highlights this case as a reminder of the critical importance of global companies complying with local laws, particularly concerning data protection and information processing responsibilities.

“In line with the advancement of technologies in the legal field, this procedure allows for a more agile response, especially in situations that require quick action. In addition to Elon Musk, the lawyers of X in Brazil were also summoned, ensuring that both the interested party and their legal representatives were aware of the decision and the consequences of its non-compliance. This common practice in the legal system ensures that the defense has full knowledge of the procedural acts and can act effectively, respecting the deadlines and ensuring the integrity of the rights involved”, Pigão explained to BeInCrypto.

How Will This Situation Affect the Brazilian Crypto Community?

The potential ban of X in Brazil might have far-reaching consequences. Data from Statista reveals that Brazil ranks sixth as countries with the largest X user base, with 21.48 million users as of April 2024.

Furthermore, this decision might affect the country's crypto community. According to a recent survey by CoinGecko, 34.4% of crypto traders and investors rely on X for their information needs. Specifically, 66.7% of the 1,065 survey participants identified X as their primary source of crypto information.

While users can always use virtual private network (VPN) applications to manage this issue, the government may extend its ban on these services. A recent report suggests that several VPN providers reported that at least 30 VPN apps are not available for Brazilian users of Apple's App. Although some reported that their services are back to normal, it remains uncertain how the country will regulate internet usage in the future.

Brazil's supreme court's plan to ban X follows a similar move from the Venezuelan government. Earlier this month, BeInCrypto reported that the government banned X due to a public confrontation between Venezuelan President Nicolás Maduro and Elon Musk. Notably, the Venezuelan ban on X was quickly followed by restrictions on Binance, the world's largest crypto exchange by trading volume.