Brazil’s Securities and Exchange Commission (CVM) has blocked an offer of securities related to a local bitcoin mining operation.
The regulator said that the offering for HashBrasil being pitched to investors was not authorized, identifying how it used social media channels for promotion.
It claims that the operators of HashBrasil were not authorized to engage in any activities on the securities market as they are not registered as a securities issuer, and has launched a public offer without registration (or exemption from it) with the CVM.
“The Authority has identified that the company and the individual mentioned above are publicly offering…an investment opportunity related to quotas in a bitcoin mining investment group using appeal to the public for the conclusion of contracts that may be included in the legal concept of security,” according to a translation of the statement.
The regulator has threatened to fine the operators of Hash Brasil R$5,000 per day($1,500) – if they failed to comply with the suspension.
Last year, the head of Brazil’s central bank reportedly compared bitcoin, and other cryptocurrencies, to a pyramid scheme.
Central bank president Ilan Goldfajn claimed that while it was key to “separate” bitcoin from other applications of its underlying technology, those buying cryptocurrencies are chasing the same kind of returns as those who invest in pyramid scams, according to RttNews. He said: “The bitcoin is a financial asset with no ballast that people buy because they believe it will appreciate. That is a typical bubble or pyramid [scheme].”
With the 12 months marking a substantial rise in cryptocurrency investing, there has been a number of questions about how the market should be regulated.
Earlier this year in the UK, the Treasury Committee launched an inquiry into unregulated digital currencies and distributed ledger technology. The committee said it will look into the role of digital currencies in the UK, including the opportunities and risks that digital currencies may bring to consumers, businesses, and the government.
While Japan’s cryptocurrency industry was reported to be preparing to establish a self-regulatory body. A group of Japanese cryptocurrency exchanges are in the process of uniting to create a self-regulating body following the Coincheck hack earlier this year according to Nikkei. The move comes after the Coincheck exchange had $533m-worth of NEM tokens stolen in a security breach last month.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
