They're just shutting down their local offices in Brazil, which are primarily used to represent X legally.
This is happening because a Supreme Court judge is conducting an inquiry to persecute those he deems propagators of fake news. In most legal systems, it would be considered highly illegal for a judge to conduct an investigative inquiry. It is also illegal in Brazil, but the other members of Supreme Court authorized this inquiry ("in the name of democracy") and turned a blind eye for all its absurd consequences.
This judge doesn't need the prosecutor's office or any private individual to initiate the proceedings. The scope of this inquiry is very broad (fake news as a whole) and has no expiration date, making it potentially eternal. In some cases, he himself is supposedly a victim of fake news, which means this judge potentially occupies three roles: judge, prosecutor, and victim. As a result, ordinary citizens in Brazil can be "summoned" to the Supreme Court's jurisdiction immediately if the accusations are connected to this Fake News inquiry. Since the Supreme Court is the final jurisdiction for appeals, people unfortunate enough to get caught in this arbitrariness lose the right to appeal the decisions of a judge that is also the de facto prosecutor.
A few days ago, there were some leaks showing this judge's assistants being asked to write reports against some individuals and news organizations that the judge wants to prosecute. In one instance, where there was no wrongdoing to report about a certain right-wing newspaper, the judge replied to his assistant: "Just look for some spicy allegations and be creative". So this judge is using his superpowers to direct the investigation to serve his own ends, which mostly involves silencing critics of the Supreme Court and himself.
His most recent power trip involves sending secret orders to X's Brazilian legal offices, demanding some accounts be blocked, and asking for all information related to these accounts. The judge stipuled daily fines for disobedience. But X's Brazilian workers don't have direct control of which accounts are blocked or not, so they tried to appeal to the full Supreme Court judges (which so far has not responded), and no account was blocked or doxxed. The judge then raised the daily fines further and threatened to jail X's chief lawyer in Brazil, even though this lawyer has no control over what happens to X's accounts. It's as if he were threatening to arrest a lawyer for the supposed crimes of his client. To protect these workers from unfair arrests, Elon Musk laid off all workers from X's local offices in Brazil, effectively closing all operations in the country.
The site and the app will continue working until the judge comes up with some bullshit reason to order all Brazilian ISPs to block access to X's servers.
Earlier this year, Moraes ordered X to block certain accounts, as he investigates so-called "digital militias" that have been accused of spreading fake news and hate messages
I hate to defend that cesspool of a site, but I don't think it's appropriate for social media websites to ban accounts at the whim of foreign governments. Reasonable people should just choose to stop using Twitter altogether and leave it to the Nazis so that it can finally go the way of Gab et al.
Disinformation campaigns are specifically designed to undermine the reasoning capabilities of people by inveigling them into believing (usually emotionally provocative) falsehoods, turning them into misinformation conduits in the process.
It’s like saying that meth should be legal because reasonable people should just chose not to use it, ignoring the social and mental health issues that drive people to consume it against their best interest.
Sometimes the right thing to do is to cut off the head of the snake before it can bite you.
I get that, but Twitter isn't based in Brazil at all. What happens if, say, China declares that certain posts are "misinformation"? Should those be taken down without complaint?