According to Circular Letter CVM/SIN 01/2018 issued by the Securities Commission’s (“CVM”) institutional investors relationship agency on January 12, 2018, investment funds are forbidden from investing directly in bitcoins and other virtual coins.
CVM clarifies that, based on its technical understandings, the virtual coins (including bitcoins) may not be qualified as financial assets, and for this reason, their direct purchase by the investment funds governed by Instruction CVM No. 555/2014 is not allowed.
CVM also evaluates that virtual coins may create pyramid scheme, money laundering, tax dodging and exchange values.
In addition, virtual coins have the potential to harm investors, due to the relevant speculative movements.
Circular Letter CVM/SIN 01/2018 also reinforces that the present discussions about virtual coins and bitcoins’ investments are incipient, being necessary to await the progress of the Legislative Bill in progress No. 2.303/2015, which shall be forwarded for the Senate’s analysis within this year.
Based on the abovementioned, CVM considered that the managers and administrators of investment funds should await a more conclusive resolution on the subject from the institutional investors relationship agency to structure the investments in virtual coins and bitcoins.
The Digital Law Department of Kestener, Granja & Vieira Advogados is available to provide any further information required on this subject.
Fabio Alonso Vieira
Phone: +55 11 3149-6111
This article is intended exclusively to provide information and does not contain any opinion, recommendation or legal advice from KGV Advogados in relation to the matters herein addressed. Copyrights are reserved to Kestener, Granja & Vieira Advogados.
