Brazil’s SEC wants to change its role in cryptocurrency regulation

Brazil’s Securities and Exchange Commission is reportedly making changes to the country’s legal framework for cryptocurrency regulation.

According to local media, a big concern is that the bill in question doesn’t appear to consider tokens as digital assets or securities — and therefore don’t fall under SEC regulation. The revised position of the country’s SEC follows the appointment of a new board and the increasing relevance of the crypto sector in the country’s financial services.

Brazilian lawmakers have been working on regulations for cryptocurrencies since 2015, but the Senate only approved the final version of the bill in April 2022. Once Brazil’s Congress completes its final amendments, the bill will be sent to the country’s president, who will sign it. Law.

As defined in the adoption text, a virtual asset is a digital asset that can be traded or transferred electronically and used for payment or investment purposes. In addition, it outlines Know Your Customer (KYC) procedures and sets out mechanisms to prevent money laundering. According to the bill, non-fungible tokens (NFTs) are also not considered securities, as most other tokens are under discussion.

In a memo to a local newspaper, a Brazilian SEC representative said:

“The proposed bill requires specific amendments, including the definition of virtual assets, prior authorization requirements, and the approval of business combinations with redundant roles for CAD. [Brazilian Federal Trade Commission].”

Lawmakers believe they could send the bill to the president to decide what role Brazil’s central bank and SEC should play in authorizing initial coin offerings and regulating the market. Some lawmakers see the measure as a legal uncertainty, arguing that an entirely new bill should be introduced. In June, another bill related to cryptocurrencies was presented to the Brazilian Congress. If approved, the proposal would grant the right to use cryptocurrency as a means of payment, while keeping private keys from being confiscated in court. The bill is now awaiting consideration by a legislative committee.