The status of cryptocurrencies in Brazil – Financial Regulatory Authority

The Brazilian Securities Commission (CVM) has suspended a Forex broker that offers Bitcoin options (BTC).

On September 25, CVM issued a public warning about the illegal actions of XM Global Limited.

The superintendent of market and intermediary relations (SMI) argued that the broker is not authorized to operate in Brazil or provide services to clients who live there.

The CVM ordered the immediate suspension of the forex investment offers or derivatives. If the condition is not met, the company will be fined $ 1,000 ($ 239) per day.

XM Global is a major trading platform, but forex options are forbidden in Brazil. No company is authorized to sell these types of options in the country. The company started trading Bitcoin on US dollars in 2017, even though the status of cryptocurrencies in Brazil does not allow this

The financial regulator says that the platforms that trade cryptocurrencies need the authorization of the municipalities.

Clarifications on the status of cryptocurrencies in Brazil

On September 10, CVM stated that companies or individuals who raise funds from third parties for investments in cryptocurrencies need the authorization of local municipalities.

CVM added that although Bitcoin and cryptocurrencies do not have a defined status in the country, encrypted investments

“They can be understood as securities and, as such, require an opinion from the local authority, even if the investment offer is crypto-to-crypto.”

In August, the Central Bank of Brazil announced that it would adopt the IMF’s classification of cryptocurrencies as non-financial products. According to the International Monetary Fund (IMF) standards, cryptocurrencies traded are accounted for as commodities in the central bank’s balance sheet.