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Brazil’s securities regulator urges Mercado Bitcoin to provide details on issued tokens

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Brazil’s Securities and Exchange Commission (CVM) has ordered local exchange Mercado Bitcoin to disclose details on some tokens issued over the last two years. Estadao newspaper reported the matter on Tuesday, noting that the tokens in question are fixed-income tokens.

The report did not disclose the names of the tokens, but details show that they were backed by real-world assets and issued on distributed ledger technology (DLT). Furthermore, they were described as high yield and low risk and had an affinity with the energy sector.

There are concerns in some quarters that the securities watchdog is putting the final pieces of a case against Mercado Bitcoin for violating security regulations. However, executives of the exchange have rebuffed the claims, saying they are fully compliant with existing laws.

“We do not make public offerings of securities outside the scope of the authorizations we hold as an authorized crowdfunding platform and investment managers,” read a statement put out by the exchange.

Mercado Bitcoin’s statement revealed its eagerness to work with the CVM and the nation’s central bank to add its quota to the “construction of regulations” for the industry. To comply with the directive of the CVM, Mercado Bitcoin will forward information regarding the amount raised on the sale of the tokens and a comprehensive list of investors that purchased them.

Mercado Bitcoin is the largest exchange in terms of transaction volume in Brazil and holds a sizable portion of Latin America’s market share. The firm had previously unveiled plans to wade into the Mexican markets later in the year, and it will be interesting to see how they meander the North American regulations.

Mercado Bitcoin’s torrid year

Mercado Bitcoin’s parent company, 2TM, went through a torrid season that affected the holding company’s finances. To stay afloat through unfavorable macroeconomic conditions, 2TM was forced to lay off 15% of its employees, making it the second time in 2022 that it slashed its workforce.

The company took swipes at Brazilian regulators for not expediting a bill on digital assets that it believes would have created an enabling environment for the industry players.

“The adversity in the economy continues, and the competitive environment continues to deteriorate and [is] unfair, without the approval of the legal framework for crypto assets, with players that follow the laws penalized against companies that ignore local rules,” read a statement 

The events of 2022 have soured the previous year’s highs that saw Mercado Bitcoin raise $200 million from SoftBank and attain unicorn status.

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