Investment funds can now invest in crypto in Brazil, but will have to comply with current regulations approved by the country’s president, Jair Bolsonaro.
On December 24, the Brazilian Securities and Exchange Commission (CVM) approved for the use of crypto to be included in investment fund holdings.
In a statement published by CVM, the regulator wrote that the inclusion is intended to allow funds to operate in the crypto sector, while also paying attention to controls related to the integrity and ownership of the assets.
For a crypto asset to be eligible to be part of fund portfolios, the CVM said that they would have to follow criteria that has been newly established in a law just freshly enacted on Thursday by Brazil’s outgoing president, Jair Bolsonaro.
Within the law, crypto assets are allowed to be part of investment funds as long as they are traded in entities authorised by either the CVM or the Central Bank of Brazil. If trading were to happen or be involved with entities from abroad, a local supervisor is to be appointed, adds the CVM.
About Brazil’s latest crypto regulation bill
On Thursday, Brazil’s outgoing President Jair Bolsonaro enacted a new crypto in Brazil regulation bill that had been recently passed by Brazil’s Chamber of Deputies and the Senate.
The new regulatory bill also creates a “virtual provider license”, where companies that operate in Brazil who are involved with crypto – including digital asset companies, exchanges, and trading platforms – must register under.
Crypto companies in Brazil have 180 days to comply with the new rules in order to legally continue operations within the country.
The bill also introduces how the crime of fraud involving virtual assets is declared – with a penalty of between four to six years in prison, in addition to a fine.
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With the new bill, the CVM is to supervise activities of digital assets that fall into the category of securities. Digital assets that don’t fall into the category of securities would be overseen by another yet-to-be-created governmental body.