Last-gasp Brazilian Securities Regulator Intervention Could Scupper MPs’ Efforts to Police Crypto

Brazilian markets regulator says it wants to play a leading role in regulating crypto – in a move that could derail parliamentarians’ own attempts to regulate the sector.

Per the financial arm of the newspaper giant Globo, the Brazilian Securities and Exchange Commission, known locally as the CVM, has ditched its laissez-faire attitude to crypto and now wants to play a key part in policy formation for the sector.

The change of heart follows a change of management at the helm of the CVM. But the crypto sector may not welcome this news: A relatively pro-industry bill is now in its advanced stage of formation in the lower house after having passed the Senate.

Globo reported that the CVM is now “pressing for significant changes in the legal framework” that governs crypto, which “may make it impossible to approve the bill in Congress” and bring policy discussions about the sector “back to square one.”

The media outlet added that the “main point of disagreement” pertains to Article 1 of the bill, which essentially dictates that the CVM is not responsible for any coin that is not classified as a security. But the CVM also has problems with other parts of the bill.

CVM demands slow progress of bill already passed by Senate

The existing bill began life as a private member’s motion in Congress back in 2015 and has already been approved by the Senate. Lawmakers in Congress had been hoping to fine-tune the bill in the house before sending it to the Presidency for final approval in the coming weeks.

One of the MPs who helped spearhead the bill, Expedito Netto, was quoted as stating that he was unaware of the CVM’s demands and stated that it was “not possible to add any more provisions to the text.”

The media outlet suggested that one way “not to lose several years’ worth of” progress on the bill would be for the Presidency to veto the articles the CVM is not happy with and allow parliament to amend these before sending the bill back to the Executive.

But other parliamentarians appear keen to rip up what they have worked on and start again. 

One Senator was quoted as stating that the crypto industry itself had already “revised some” of the “concepts” included in the bill – and concluded that it would be “preferable to sit down and start over.”