The Securities and Exchange Commission of Brazil (CVM) said that local investment funds are prohibited from investing in cryptocurrencies. This is reported by Bitcoin.com.
The corresponding CVM directive is addressed to all employees and official agencies responsible for monitoring the activities of investment funds in the country. The document says that the crypto-currencies are not regarded by the regulator as financial assets, and therefore direct investment in them is prohibited.
Moreover, local funds wishing to invest in the cryptocurrency not directly but through foreign companies are advised not to rush into this and expect further statements by the regulator.
In May last year, the House of Representatives of the National Congress of Brazil created an ad hoc committee to regulate crypto-currencies. During the second half of last year, it held seven public hearings on issues related to digital assets.
In December 2017, CVM and the central bank of Brazil issued a joint statement, which deals with the risks associated with crypto-currencies. In the same month, the representative of the House of Representatives, Expedito Netto, proposed recommendations that, in effect, prohibit cryptotrading, storage, and exchange of digital currency for fiat without official authorization. As punishment to violators, the people's deputy recommended imprisonment for up to six months or a fine. At the same time, Netto did not specify what exactly such a "permit" should be like.
In addition, during the December public hearings, Jonathas Ramalho, Executive Director of Banco do Brasil, spoke in favor of regulating crypto-currency. In his opinion, the creation of rules for circulation of digital money in the country will help create an enabling environment for the development of the blockchain industry.