This week, the Securities and Exchange Commission (CVM) issued stoppage orders against two foreign cryptocurrency brokers involved in offering forex and cryptocurrency trading services to Brazilians without due authorization from the regulatory body.
The determinations, presented through Declaratory Acts, targetKaarat Limited, based in Saint Vincent and the Grenadines, andCoinBene, an exchange based in China.
Kaarat Limited was the focus of the first stoppage order issued by the CVM. According to theorder, the company would be offering forex and cryptocurrency trading services to Brazilian investors, without due authorization from the authority. This action was identified by the CVM's Market and Intermediary Relations Superintendence (SMI), as disclosed in Declaratory Act No. 21,928.
“The company Kaarat Limited does not have authorization from the CVM to intermediate securities or raise funds from investors for investment in securities”, declared the CVM, ordering the immediate suspension of any public offering of the company in Brazil.In addition to forex trading, a practice prohibited in the Brazilian capital market, the company also offered “positions” in trading pairs involving Bitcoin, XRP and Ethereum.
As a sanction for non-compliance with the order, the CVM established a daily fine of R$1,000, to be applied if the company continues to offer its services to Brazilian investors or through people linked to it.
The second broker affected, CoinBene, had a slightly larger restriction order. The municipality banned CoinBene and its founder, Chenmin Gao, from attracting customers in Brazil. CMV also immediately suspended the public offering of financial instruments with the characteristics of derivative contracts, including futures contracts linked to cryptocurrencies.
The Stop Order against CoinBene was published in the Official Gazette of the Union, accompanied by the threat of a daily fine of R$1,000 if the broker disobeys the CVM order.
In addition to the measures against foreign brokers, the CVM also issued a stoppage order against the company Mais Escola de Negócios, which operates with Forex, and its manager, Anderson Moreira Pinheiro.
The company was accused of attracting Brazilian clients for operations in the Forex market without due authorization from the local authority. Likewise, the CVM established a daily fine of R$1,000 in case of disobedience to the suspension order.
