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Brazilian Securities and Exchange Commission to allow investment in crypto assets by investment funds

The Brazilian Securities and Exchange Commission has recently released a new regulatory framework for investment funds and has approved the inclusion of crypto assets in these funds

Shashank Bhardwaj
Published: Dec 28, 2022 05:41:21 PM IST

Brazilian Securities and Exchange Commission to allow investment in crypto assets by investment fundsImage: Shutterstock

On December 23, the Brazilian Securities and Exchange Commission (CVM) approved the ability to invest in crypto assets by investment funds. This decision allows investment funds to operate in the crypto market while also implementing measures to ensure the integrity and proper ownership of assets.

The CVM has stated that in order for crypto assets to be included in investment fund portfolios, they must meet certain criteria outlined in a new regulatory framework set forth by a law passed by the outgoing Brazilian President, Jair Bolsonaro.

The Brazilian Securities and Exchange Commission has recently released a new regulatory framework for investment funds and has approved the inclusion of crypto assets in these funds. The regulator emphasised the importance of maintaining control over the presence, integrity, and ownership of assets in this new market segment.

Crypto assets must meet certain criteria in order to be included in an investment fund portfolio in accordance with the regulatory framework for the sector approved by President Bolsonaro.

Crypto assets may be included in investment funds if they are traded through entities that are authorised by the Brazilian central bank or the CVM or through a local supervisor in the case of operations conducted in another country.

These entities must have the legal authority to oversee and inspect the operations being carried out, including implementing measures to prevent money laundering and financing terrorism.

In October, the Brazilian Securities and Exchange Commission released a market guidance opinion on the crypto sector.

While crypto assets are not explicitly defined as securities in this document, market participants must consider the characteristics of each asset to determine whether it should be considered a security. The tokenization of assets is not required to be approved or registered by the CVM, but token issuers and public token offerings will be subject to regulation.

The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash


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