The Brazilian Securities and Exchange Commission is reported to be working to reform the country’s legal framework to better cryptocurrency regulation.
One major issue, according to the local media, is that the legal bill seems to not consider tokens as digital assets or securities. As a result, they would not be subjected to the SEC’s regulations.
The nation’s SEC has since changed its position after the appointment of a new board and the growing importance of the crypto sector in the country’s financial services.
The legislators in Brazil have been putting efforts in establishing crypto regulations for around seven years. However, the Senate did not pass the final bill until April 2022.
The finalised bill will be in effect once it has received an official approval from the country’s president, Jair Bolsonaro.
The approved text defined a virtual asset as a digital representation of value that can be electronically traded or transferred and utilised for payment or investment purposes.
It also establishes ways to prevent money laundering and highlights the best practices for Know Your Customer (KYC) procedures. In accordance with the bill, nonfungible tokens (NFTs) are not regarded as securities, but most other tokens are still up for debates.
According to Brazil’s SEC representative, said bill “needs specific improvements, including the definition of virtual assets, prior authorization requirements, and the approval of business combinations in redundant roles with the Cade [Brazilian Federal Trade Commission].”
The lawmakers believe that they should leave it to the president to decide what roles the Brazilian Central Bank and the SEC should take up when it comes to initial coin offering (ICO) authorisation and market regulation.
But, not all legislators are on the same page as they believe this measure to be legally vague. Instead, they suggested that an entirely new bill should be introduced
Another crypto-related bill was submitted to the Brazillian Congress in June. The proposal, if approved, would allow the use of cryptocurrency as a form of payment while preventing judicial seizure of private keys. The committee of the legislators is now reviewing the draft of the law.
