Brazilian SEC is looking to change crypto regulation with new bill

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According to reports, the Brazilian Securities and Exchange Commission is looking to switch up the country’s legal framework for cryptocurrencies. The main concern is that the bill in question does not consider tokens as digital assets or securities, which means that it does not fall under SEC regulation. Subsequently, the updated position of the Brazilian SEC follows the appointment of a new board as well as increased relevance of the crypto sector.

This move did not come all of a sudden, since lawmakers have been toying with the idea of changing crypto regulations in Brazil since 2015. However, the Senate only approved the final version of the bill in April 2022. The final steps would be Congress’ revision and then the bill being signed by the president.

In the approved text of the bill, “a virtual asset is a digital representation of value that can be traded or transferred electronically, and used for payment or investment purposes.” It also delves into procedures for Know your Customer (KYC) and security methods to prevent money laundering. Non-fungible tokens (NFTs) are not considered securities as per the new and approved bill, while the status of most other tokens are still being decided.

A representative from Brazil's SEC commented, "The mentioned 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]."

Legislators also believe that the bill should be sent to the president to get the final say on what roles the Brazilian Central Bank and the SEC should play in authorizing initial coin offerings and regulating the overall market to make matters clearer. However, some legislators sit on the other side of the debate, saying that an altogether new bill should be introduced.