On March 7, 2018, the Federal Securities Commission (“CVM”) provided clarifications related to the countless notices received related to the virtual asset offering, also known as Initial Coin Offerings (“ICO”), in order to clarify the investors doubts.
Lately, CVM is responsible for analyzing the documents used in the distribution of digital assets and monitoring all clarifications notices and requests made by the investors related to the ICO transactions, in order to verify if this transactions are classified as public offer in accordance with the security market regulations.
At this time, none of the ICOs were waivered or registered as a public offerings at CVM.
Furthermore, CVM recommended that all the investor should be aware about the risk involving this type of investment, such as: (i) fraud and financial pyramids; (ii) the inexistence of formal procedures regarding the investors profile that may indulge risks to the enterprise; (iii) risks of money laundering or fiscal evasion or even currency; ( iv) the act of service providers without any compliance to regulations or applicable law; (v) public offers that do not comply with the CVM regulations; (vi) operational risks in negotiations; (vii) cyber risk; (viii) operational risk; (ix) volubility; (x) liquidation risks; and (xi) challenges in the judicial aspect when in case of a litigations.
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.
