The Brazilian Securities and Exchange Commission (CVM) has sent a subpoena to Mercado Bitcoin, one of the biggest exchanges in the country, to inquire about the services the company lends regarding cryptocurrency-related fixed return investments. They will need to reveal the investment details and whether they intend to keep them open to the public.
Mercado Bitcoin is subpoenaed for Fixed Income Token Investments
Some cryptocurrency exchanges offer more than that. In Latam where high inflation is a problem, they also have bank-like products. The Brazilian Securities and Exchange Commission (CVM), has requested information from Mercado Bitcoin about its services to customers.
A subpoena is issued in order to obtain information about the offerings made by the Tokens Section on the website of Mercado Bitcoin. According to the CVM this section allows customers to diversify their portfolios with low risk, and to receive high yield in different areas.
This token is available to customers who own more than one stablecoin. It is supposedly capable of providing higher returns than standard savings products for the short term.
CVM Subpoena Details
CVM requires certain information regarding how these tokens function. Mercado Bitcoin has to disclose the names and addresses of all customers who invested in the products from January 2020. Mercado Bitcoin also needs to declare if the company plans to offer these token products again in future. If the CVM determines the products to be irregular, sanctions could come down on the company.
Mercado Bitcoin insists that it doesn’t offer any irregular services. According to the company, this statement was:
The authorizations that we hold as an investment platform and authorized crowdfunding company do not allow us to offer securities publicly.
The company stated that it takes the greatest care not to infringe on the area of action of authorized bodies and that it had consult about the structure these tokens prior to offering its products in 2020.
This is not the only problem the exchange faces this year. The company has already executed two separate layoff rounds this month, one in June and another earlier this month. Softbank backed Mercado Bitcoin in their Series B financing round of 2021. This raised $200 million and helped the company reach a valuation exceeding $2 billion.
What do you think about Mercado Bitcoin’s CVM subpoena? Please leave your comments below.
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