With every passing day, cryptocurrencies are being widely included in the business offerings of firms, offerings based on the fact that many prospective individuals are growing more inclined towards digital assets. However, the downside of this is that many firms have begun to offer such crypto-services to the public, without proper approval and licenses from the authorities.
In light of many such cases emerging across the world, local governing bodies have stepped forward to ban such activities. Brazil’s Securities and Exchange Commission (CVM – Comissão de Valores Mobiliários) is one of these bodies and is now in the news after it halted the business operations of XM Global Limited, an organization that operated in the Forex market space and offered Bitcoin-related services to the public.
The prohibitory action was taken by the CVM under the Declaratory Act 17.397. A fine of R$ 1.000,00 will be imposed, along with a ban on the business offerings of the organization, as its services were not authorized by the municipality to be made available to Brazilian customers as it is not part of the distribution system that was provided by article 15 of the Act. The declaration read,
“I – the securities market participants and the general public who are XM GLOBAL LIMITED is not authorized by this Municipality to collect customers resident in Brazil, as it is not part of the distribution system provided for art. 15 of Law No. 6,385 of 1976;
II – order XM GLOBAL LIMITED to immediately suspend any offer investors resident in Brazil of investment opportunities in Brazil. binary options market or any other derivatives, warning that the failure to compliance with this determination shall subject it to the imposition of a fine daily, in the amount of R $ 1,000.00 (one thousand reais), without prejudice to liability for infringements already committed prior to the publication of this Act Declaratory, with the imposition of the applicable penalty, under the terms of art. 11 of the Law 6,385, of 1976, after the regular sanctioning administrative process; and
III – that this Declaratory Act shall enter into force on the date of its publication in the Union Officer.“
Previously, XM Global was delivering services for the trading and leverage market space. Yet, with prohibitions imposed over the Forex market in Brazil, no organization has been allowed to trade in the Forex space. Also, the CVM has not authorized any organization to expand their services into this space.