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Brazilian Securities and Exchange Commission CVM Defines Rules to Classify Cryptocurrency Assets as Securities – Regulation Bitcoin News


The Brazilian Securities and Exchange Commission (CVM) has clarified the criteria by which various crypto assets can be considered securities. Through the release of a guidance advisory, the CVM defines different classifications for existing crypto assets, specifies which assets can be viewed as securities, and explains how intervene in these markets.

Brazilian Securities and Exchange Commission CVM settles classification of crypto securities

The Brazilian Securities and Exchange Commission (CVM) has issued a guidance comments documents related to the issue of cryptocurrency-based securities. The document acknowledges that there is still a gap on this topic since there is no specific regulation that defines a cryptocurrency as a digitally represented asset, protected by cryptographic technology, that can be delivered translated and stored through Distributed Ledger Technology (DLT).

Under the new criteria, tokens that can be considered securities must be digital representations of the following structures: shares, debentures, signup bonuses; right coupons, registration receipts and segregation certificates related to securities; securities deposit certificates; and debit note.

In the same way, other types of tokens can also be considered securities depending on their classification. CVM further clarifies that tokenization of assets will not be subject to institutional approval or pre-registration, but if the resulting assets are considered securities, they will be subject to existing security regulations.

Classification system for crypto assets

The document also divides crypto assets into three different categories. The first type is called payment tokens, which include assets intended to replicate the functions of fiat currency, including units of account, medium of exchange, and store of value.

The second layer are utility tokens that have a face value and include all tokens used to obtain or gain access to certain products or services. The third layer is called “asset-backed tokens”, which includes all tokens that are digital representations of physical or digital assets. This class includes stablecoins, security tokens, and non-fungible tokens (NFTs).

The CVM clarifies elements of this final layer can be considered securities depending on the specifics of each token in the class. The document states that CVM will continue to survey the cryptocurrency market and will act on these new definitions. However, none of these criteria is final and they are subject to change in the future when regulation on this topic is adopted.

Last month, CVM summons Mercado Bitcoin, a local cryptocurrency exchange, on fixed income token investment services.

What do you think of the new securities definition for crypto assets in Brazil? Let us know in the comments section below.

Sergio Goschenko

Sergio is a crypto journalist based in Venezuela. He describes himself as a latecomer to the game, entering the crypto world when the bull run occurred in December 2017. Has a computer engineering background, lives in Venezuela and is affected by the volatility. crypto boom on a social level, he offers a different perspective on the success of cryptocurrency and how it helps the unbanked and underserved.

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