Brazil’s securities regulator has snubbed a regulatory framework that lawmakers approved early this year, currently seeking a massive role within virtual asset regulations.
Brazil’s Senate authorized the new digital asset framework in April 2022, following a five-year analysis. It defines virtual assets and associated concepts like NFTs (non-fungible tokens). Also, it highlighted the limits of every watchdog’s jurisdiction within the industry, from the SEC (Securities & Exchange Commission) to the central bank.
Nevertheless, the regulator doesn’t favor regulations. A local outlet revealed that the agency (locally known as the CVM) prefers a massive role in regulating the cryptocurrency sector. The reports state that the CVM’s main problem is how the bill defines security and what does not within the blockchain industry.
The Regulatory Framework
Besides considering Bitcoin as outright security, the framework does not recognize most coins as securities, putting them above the CVM’s authority. Also, it doesn’t consider non-fungible tokens as a security, setting another rapidly expanding and crucial industry beyond CVM’s power. Meanwhile, the agency leadership hasn’t found that attractive.
Meanwhile, the CVM calls for Brazilian watchdogs to assess and mend the bill. Also, they want a delay by President Jair Bolsonaro when authorizing it into law. An official told the news outlet that the law requires specific improvements, including virtual asset definition, prior legalization requirements, and business combinations approval in terminated roles with the Brazilian Fed Trade Commission.
Director Joao Accioly led the CVM from May, one month after the Senate authorized the bill. Accioly asserted that the past leadership was not fascinated with monitoring the crypto market – the reason they did not oppose the bill. He added that CVM would adopt more roles in BTC oversight.
Brazil shows its presence in the cryptocurrency world. For instance, Brazil’s ex-central bank president Henrique Meirelles joined the Binance Advisory Board. The world’s leading crypto exchange continues to increase its team, regardless of the current bear market. Meirelles joins the trading site as an adviser. Can such steps impact the nation’s market regulation?
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