Brazil’s securities market regulator targets Mercado Bitcoin over token sales

The Brazilian Securities and Exchange Commission (CVM), the securities market regulator in Brazil, has ordered Mercado Bitcoin, the largest cryptocurrency exchange in Brazil, to provide information on the interest rate tokens the exchange has issued over the past two years.

According to reports from the newspaper Estadão, the capital market regulator wants to know the amount Mercado Bitcoin raised with tokens and see a list of investors who participated.

While the report did not reveal the names of the tokens, it did confirm that they were issued on a blockchain and allegedly backed by real-world assets. The report further said the tokens were “low risk and high return” in “consortium, energy, payment requests and receivables.”

Mercado Bitcoin has responded to the matter, saying the token sale fully complied with Brazil’s regulations. The exchange further said it is “actively” working with the securities market regulator and Brazil’s central bank to “contribute to the construction of regulations for the sector.”

“We do not make public offerings of securities outside the scope of the authorizations we have as an authorized crowdfunding platform and investment manager,” Mercado said.

At the beginning of this month, the CVM banned Singapore-based crypto exchange Bybit from trading securities in the country. On September 5, Bybit was kicked out of the Brazilian market due to its alleged unregistered securities offering. The country’s securities watchdog ordered the Singaporean exchange to cease operations immediately or face a one-day fine.

CVM alleged that Bybit sought to obtain funds from Brazilian investors for investments in securities without the company having authorization to act as a securities intermediary. The regulator claimed that only Brazil’s stock exchange B3 is allowed to offer securities in the country.

This month, 2TM Group, Mercado Bitcoin’s parent company, criticized Brazilian regulators for not being clear on cryptocurrency regulation. The company said the current environment in Brazil is unfair and has yet to develop a clear regulatory framework for crypto activities.

Meanwhile, reports indicate that the CVM is preparing to release an official crypto guide soon, but urges companies to consult the commission before issuing a token that could be considered a security.

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