The Brazilian Securities and Exchange Comission (CVM) entered into a BRL 9.6 million Term of Commitment with one of the largest crypto exchanges in the world to close a case that involved an alleged public offering, distribution, and mediation of securities negotiations by a company that is not part of the securities distribution system, without obtaining an exemption from registration with the CVM.
In the case analyzed CVM, the accused company offered on its website a platform for trading derivative contracts based on cryptocurrencies, in a system that allowed leverage of up to 125 times.
The CVM issued a Stop Order alerting the market about the lack of authorization or exemption from authorization by the accused company, but the measure was only partially complied with by the accused company, generating complaints from investors and entities in the Brazilian crypto market.
CVM concludes that the accused company: (i) offered the negotiation of cryptocurrency futures contracts, considered derivatives for the purposes of capital market regulation; and (ii) carried out the offer via the internet, making the platform accessible to Brazilian investors and did not contain any restrictions on trading by people resident in Brazil.
After negotiation regarding the values of the Term of Commitment, which was influenced by the signing of an agreement between the accused company and the Commodity Futures Trading Commission (CFTC) and the Department of Justice (DOJ), both from the USA, in relation to the practice of the same irregularities investigated by the CVM, the accused company committed to paying BRL 9.6 million, given the repercussion of the case and the effects of the Term of Commitment before the market.
Therefore, the distribution of securities involving cryptocurrencies requires the same care as other offerings, being essential the compliance with CVM’s legislation.
