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

Brazilian Securities and Exchange Commission, (CVM), has established the criteria that different cryptocurrency assets may be classified as securities. The CVM issued a guidance opinion document that clarifies the criteria for different types of cryptocurrency assets. It also specifies what can be considered securities and how it will act in these markets.

Brazilian Securities and Exchange Commission (CVM) Crypto Securities Classification

A new opinion document has been issued by the Brazilian Securities and Exchange Commission. It addresses crypto-based securities. Although the document acknowledges that there are still gaps in regulation on this subject, it defines cryptocurrency as digitally protected assets. These can be stored and transacted through Distributed Ledger Technologies.

Tokens considered securities by the new criteria must represent digital representations or the following structures: shares and debentures; subscription bonuses; subscription coupons; right coupon; split certificates; certificates of security deposit; and debenture note.

The same applies to other types of tokens, which can be classified as securities. CVM clarified further that tokenization of assets is not subject to registration or prior approval. However, if assets become securities they must comply with existing security regulations.

Classification System for Cryptocurrency Assets

This document divides crypto assets into three classes. First, payment tokens are assets which attempt to duplicate the functions of fiat currencies, such as unit of account and medium of exchange.

Utility tokens are the second category. This class includes tokens used for accessing certain products and services. The third class is denominated “asset-backed tokens,” including all tokens that are digital representations of tangible or digital assets. This category includes stabilitycoins, security tokens and non-fungible tokens (NFTs).

CVM clarifies which elements can be classified as securities depending on what tokens they are. According to the document, CVM will keep an eye on cryptocurrency markets and act in accordance with these updated definitions. The criteria listed above aren’t final. They can be changed if regulation is passed.

The CVM summoned Mercado Bitcoin last month to inquire about its investment options in fixed-income tokens.

Let us know your thoughts on the Brazilian new definition of securities for crypto assets. Leave a comment below.

Sergio Goschenko

Sergio is a Venezuelan cryptocurrency journalist. His entry into the cryptocurrency world in December 2017 was when it saw a price surge, and he describes himself as being late to this game. He is a Venezuelan computer engineer with a background in social engineering and has been impacted by cryptocurrency’s boom on a personal level.

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