Brazilian Securities and Exchange Commission, which was previously opposed to playing a leading role in the regulation of crypto-assets in the nation, SEC has changed its mind and is now pressing for significant changes in the legislative system to better regulate cryptocurrencies. The key source of contention is the text’s only paragraph, which rejects any modification to the SEC’s purview and does not recognise “tokens” as crypto-assets or securities. Because of this, “tokens” would not be subject to SEC regulations.
With the exception of bitcoin, which is widely acknowledged as a non-securable asset, and digital art NFTs (non-fungible tokens), it turns out that most other tokens are in a murky area, with debates concerning whether or not they are securities. Experts debate whether an investment qualifies as a security if:
1) There is financing.
2) It is a group venture that offers compensation for the shared risk.
3) There was a public offering.
4) There are some intermediary-directed distribution activities.
The final clause of article 3 of the project disregards anything “whose issue, bookkeeping, trading, or settlement is authorised by law or regulation” when determining what constitutes a digital asset subject to regulation. In other words, the current wording permits the peculiar scenario in which tokenized real estate funds, carbon credits, court orders, receivables, and other tokens might be structured products within blockchains but would not be deemed digital assets by law. The amendments discussed would not have been included in the measure as it was moving through the Chamber, then the Senate, and is now coming back to the Chamber for a final assessment.
Behind the scenes, MPs note that the prior administration of the SEC preferred not to participate in the conversation because it lacked the staff and resources necessary to do this duty. However, the new management would have focused on the opportunities presented by the new market technology as well as the topic’s relevancy.
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