Brazil SEC rebuffs digital asset regulations, wants bigger role

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Brazil’s securities watchdog has rebuffed a regulatory framework approved by lawmakers earlier this year and is now seeking a bigger role in digital asset regulations.

Brazil’s Senate approved the new framework in April this year after working on it for at least the past five years. It defines digital assets and related concepts such as non-fungible tokens (NFTs) and outlines the extent of each regulator’s jurisdiction in the industry, from the central bank to the Securities and Exchange Commission (SEC).

However, the watchdog isn’t on board with the regulations. According to one local outlet, the agency, known locally as the CVM, wants to take a bigger role in policing the digital assets sector.

The report claims that the CVM’s primary issue is the bill’s definition of what qualifies as a security and what doesn’t in the blockchain sector. Aside from BTC, regarded as an outright investment security, the bill doesn’t consider most tokens as securities, putting them beyond the CVM’s jurisdiction. NFTs are also not considered securities, setting yet another critical and rapidly-growing sector beyond the CVM, and this has not sat down well with the agency’s leadership.

The CVM is now calling for Brazilian lawmakers to review and amend the bill while also calling on President Jair Messias Bolsonaro to delay signing it into law.

“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],” one official told a local outlet.

The CVM has been under the leadership of Director João Accioly since May, a month after the Senate approved the bill. Accioly has claimed that the previous leadership wasn’t interested in overseeing the digital asset industry, which is why it didn’t oppose the bill. Now, CVM wants to take on more responsibility in Bitcoin oversight, he stated.

Watch: The BSV Global Blockchain Convention panel, Tokenizing Assets & Securities on Blockchain