This week the CVM, Brazil’s securities regulator, published a guidance note on the regulation of crypto-assets, including when a digital asset is considered a security and disclosures to be made. For tokenized securities, it is not currently planning to relax any requirements.
João Pedro Nascimento, President of the CVM said the step aims to ensure “greater predictability and security for all, in addition to contributing towards the protection of investors and popular savings, as well as fostering a favorable environment for the development of the crypto economy, with integrity and with adherence to relevant constitutional and legal principles”.
Brazil’s concept of a security is based on the definition of a collective investment agreement inspired by the Howey Test established by courts in the United States. Howey is the same set of tests used by the United States SEC. The Howey definition is an “investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.”
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