Apparently, the Brazilian Securities Commission (CVM) is trying to modify the country’s legal framework regarding the regulation of cryptocurrencies.
According to local media, one of the main concerns is that the bill in question does not seem to consider the tokens as digital assets or securities – and therefore they would not be under the regulation of the body. The updated position of the nation’s SEC comes following the appointment of a new board of directors and the increased prominence of the cryptocurrency sector in the country’s financial services.
Brazilian lawmakers have been working on crypto regulation since 2015, but the Senate did not pass the final version of a bill until April 2022. Once Brazil’s congress completes its final reviews, the bill will be sent to the country’s president, who will sign it into law.
As described in the approved text, a virtual asset is a digital representation of value that can be traded or transferred electronically, and used for payment or investment purposes. In addition, it describes best practices for Know Your Customer (KYC) procedures, and establishes methods to prevent money laundering. According to the bill, non-fungible tokens (NFTs) are also not considered securities, while most other tokens are in full debate as to whether or not they are.
In a note to a local newspaper, a CVM representative said:
“The aforementioned bill needs specific improvements, including the definition of virtual assets, prior authorization requirements and the approval of business combinations in redundant papers with the Cade [Comisión Federal de Comercio de Brasil]”.
Lawmakers believe that a possible solution could be to send the bill to the president to determine through a decree what role the Brazilian central bank and the CVM should play in authorizing initial coin offerings and regulating the market. Some legislators consider this measure to be a legal uncertainty and argue that an entirely new bill should be introduced. In June, another bill related to cryptocurrencies was presented to the Brazilian Congress. If passed, the proposal would grant the right to use cryptocurrency as a means of payment, while protecting private keys from being taken by the courts. A draft of the law is currently awaiting review by the lawmakers’ committee.
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