Brazil’s Securities and Exchange Commission announced that local investment funds are prohibited from investing in cryptocurrencies.
The country’s regulators are currently working on crypto-regulation. Seven public hearings have already been held to discuss this subject.
The Securities and Exchange Commission of Brazil (CVM) issued a decree addressed to all officers responsible for the administration and management of investment funds in the country.
It states primarily that direct acquisitions of Cryptocurrencies by investment funds “aren’t allowed.”
Reuters then elaborated: “CryptoCurrencies cannot be considered as financial assets, regulator CVM ruled, in effect barring funds from investing directly in assets such as Bitcoin.”
Further, local funds interested in investing in cryptocurrencies indirectly by taking a stake in offshore funds should await further clarification from the regulator.
The decree reads as follows:
We consider it appropriate for managers and investment funds to await further and more conclusive manifestation of this oversight on the subject to structure the indirect investment in cryptocurrencies as described, or even in other alternative forms that seek this kind of exposure to risk.
The Brazilian Chamber of Deputies established a special committee in May last year to discuss the regulation of Cryptocurreny including BTC.
In December, The Securities and Exchange Commission of Brazil as well as the Central Bank of Brazil published a joint statement warning about the certain risks associated with Cryptocurrencies.
In that same month House Representative Expedito Netto made recommendations that would ban Bitcoin from being traded, created, and even held for third parties. As well as exchanged for fiat currencies unless legal permission is granted.
At the December public hearing held, the executive manager of Banco do Brasil’s Digital Affairs Directorate, Jonatas Ramalho, defended the creation of regulations that would permit a more lax environment for the use of Cryptocurrency.