The Brazilian Securities and Exchange Commission is reportedly working on amendments towards local  legal framework, with focus on its cryptocurrencies regulation. 

Specifically, as revealed by local media, one significant worry is that the bill in question seem to not legally view tokens as digital assets or securities – and they hence would be excluded from the scope of the SEC regulation. 

The updated position of the country’s SEC follows the appointment of a new board and the risen relevance of the crypto sphere in the nation’s financial services.

Brazilian regulators have been spending efforts on regulations for cryptocurrencies since 2015, but the Senate only granted approval for the final version of a bill in April this year. As soon as Brazil’s Congress finalizes its ultimate revisions, the bill will be moved to the country’s president, who will put his signature in to make it official.

As referred to in the approved text, a virtual asset functions as a digital representation of value that is tradable or transferred in an electronical fashion, and utilized for payment or investment purposes. 

Furthermore, it details the most appropriate practices for Know Your Customer (KYC) protocols and establishes measure to minimize money laundering. 

According to the bill, nonfungible tokens (NFTs) are also not legally viewed as securities, while the majority of other tokens are being discussed at the moment regarding what their definition will be.

“The mentioned bill needs specific improvements, including the definition of virtual assets, prior authorization requirements, and the approval of business combinations in redundant roles with the Cade [Brazilian Federal Trade Commission].”

Regulators reportedly shared their belief that a possible resolution could be to send the bill to the president to decide via decree the particular roles the Brazilian Central Bank and the SEC should assume regarding the authorization of initial coin offerings and regulating the market.