Brazil: Securities-Related Laws

At the moment, in Brazil, the cryptocurrency market is mostly unregulated although some clarifications have been gained from the regulatory authorities. In January 2018, the Comissão de Valores Mobiliários, which acts as Brazil’s equivalent of the Securities and Exchange Commission in the United States, prohibited funds from directly investing in cryptocurrencies like bitcoin on the grounds that they are not financial assets. The CVM did however, leave the door open for indirect involvement in the future. More here. Rumors in May 2018 said that Brazil’s securities regulator was set to give the green light in early May 2018 for fund managers to “indirectly” invest in cryptocurrencies, according to local news reports. However, no guidance has been published yet.

According to these speculations, the CVM will publish guidance advising fund managers on the extent to which they can participate in global cryptocurrency markets without running afoul of local regulators, according to the Folha de S. Paulo - Brazil’s largest newspaper. The document will lay out the rules and procedures that fund managers must abide by when becoming involved with cryptocurrency, such as disclosing these activities to potential investors as well as the value proposition for becoming involved in the first place.

“The opinion to be released by the agency will explain under which circumstances an indirect investment by funds in cryptocurrencies will be permitted,” explained Daniel Maeda, director of institutional investor relations at CVM, according to Reuters. An often overlooked market, Brazil’s cryptocurrency ecosystem grew from virtually non-existent in 2014 to $2.5B in 2017.


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