Brazilian SEC wants to modify its role in regulating cryptos

By: Mark Jessy

Brazilian SEC wants to modify its role in regulating cryptos

September 4, 2022 3:50 AM

The government agency, which had previously been reluctant to regulate the sector, has announced plans to instead focus on developing a definition for virtual assets.


It has been reported that the Brazilian Securities and Exchange Commission is working to amend the country's legal framework to better regulate virtual currencies.

 

As reported by the local press, one major issue is that the proposed legislation does not appear to recognize tokens as digital assets or securities, meaning that they would not be subject to regulation by the SEC. With a new board in place and crypto becoming increasingly important in the country's financial services, the SEC has revised its stance.

 

Even though the Brazilian Senate began working on cryptocurrency regulation in 2015, the final version of a bill was only approved in April of 2022. After the Brazilian Congress has finished making any necessary changes to the bill, it will be sent to the president of Brazil for his signature.

 

Virtual assets are defined in the approved text as "digital representations of value that can be traded or transferred electronically and used for payment or investment purposes." Know Your Customer (KYC) procedures and anti-money-laundering measures are also outlined. The bill specifies that nonfungible tokens (NFTs) are not considered securities, while the status of most other tokens is still up for debate.

 

A representative from Brazil's SEC stated in a report for a regional newspaper:

 

"There are a few key areas in which the aforementioned bill could use some tweaking, according to the Brazilian Federal Trade Commission (Cade): the classification of virtual assets; pre - approval requirements; and the approval of corporate governance in redundant roles."

 

Representatives have suggested sending the bill to the president so that he can issue a decree clarifying the roles of the Brazilian Central Bank and the SEC in authorizing ICOs and regulating the market. Some lawmakers have said a new bill should be introduced because this one creates too much legal gray area. Another cryptocurrency-related bill was introduced to the Brazilian Congress in June.

 

If passed, the plan would make cryptocurrency legal tender and shield private keys from judicial seizure. The legislative panel has been given a draft of the bill to evaluate.