- The Brazilian Securities and Exchange Commission (CVM) approved the ability of investment funds to hold crypto assets.
- Crypto assets can be included in a fund if they are traded in entities authorized by local or global authorities.
The Brazilian Securities and Exchange Commission (CVM) approved the ability of investment funds to hold crypto assets yesterday (December 23). The decision, according to the regulator, allows funds to operate in the crypto segment while paying attention to controls related to asset integrity and ownership.
According to the CVM, crypto assets must meet a set of criteria established by a new regulatory framework established in a law promulgated by the outgoing president of Brazil, Jair Bolsonaro, in order to be included in the portfolios of funds.
The CVM recently published a new regulatory framework for investment funds. The regulator explained in a note that the decision seeks to allow the funds to operate in this new market segment while maintaining controls over the presence, integrity and ownership of the assets.
Crypto assets must meet a set of criteria to be included in a portfolio, which is in line with the regulatory framework for the sector approved yesterday by President Bolsonaro.
Brazilian authorities implement AML/CFT guidelines
Crypto assets can be included in a fund if they are traded in entities authorized by the Brazilian central bank or CVM, or by a local supervisor in the case of operations in another country.
These bodies must be legally competent to supervise and inspect the operations carried out, including the implementation of the anti-money laundering (AML) and anti-terrorist financing (CFT) guidelines.
In October, the CVM issued a market guidance opinion on the cryptocurrency sector. Although crypto assets are not expressly listed as securities in the document, market participants must look at the characteristics of each crypto asset to determine if it is a security.
The tokenization of assets, according to the opinion, is not subject to prior approval or registration by the CVM. However, token issuers and public token offerings will also be subject to regulation.
