Brazilian SEC seeks to change its role in cryptocurrency regulation

According to reports, the Brazilian Securities and Exchange Commission is seeking changes in Brazil’s legal framework regarding its regulation of cryptocurrency.

Local media reports that one of the major concerns is that the bill does not seem to treat tokens as securities or digital assets. They would therefore not be subject to SEC regulation. After the appointment of a new board, the updated position of the SEC nation follows the increasing relevance of crypto in the country’s financial services.

Brazilian lawmakers have been working to regulate cryptocurrencies since 2015. However, the Senate approved the final version in April 2022. After Brazil’s Congress has completed its final revisions, it will send the bill to the president of the country, who will then sign it into law.

A virtual asset, as described in the approved text is a digital representation value that can be traded, transferred electronically and used for investment or payment purposes. It also outlines best practices in Know Your Customer (KYC), and provides methods to prevent money laundering. The bill states that nonfungible tokens (NFTs), are not securities. However, most tokens are currently in the middle of debates about whether they should be.

A representative of Brazil’s SEC wrote this note to a local newspaper.

“The bill mentioned needs to be improved, including the definition and authorization of virtual assets, prior authorization requirements and approval of business combinations in redundant positions with the Cade [Brazilian Federal Trade Commission].

According to legislators, they think that sending the bill to President Obama to resolve the issue could help. The president will then decide via decree which roles the Brazilian Central Bank or the SEC should have in authorizing initial coin offerings. This measure is considered a source of legal uncertainty by some legislators, who argue that a new bill should be introduced. A bill related to cryptocurrency was presented to Brazil’s Congress in June. The proposal, if approved, would allow cryptocurrency to be used as a payment method and protect private keys from being taken over by the courts. The legislators’ committee is currently reviewing a draft of the law.