On Friday 12th, the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM) issued Circular Letter No. 1/2018, clarifying that cryptocurrencies cannot be classified as financial assets, according to article 2, subsection V, of CVM Instruction No. 555/14, based on the degree of uncertainty surrounding their legal-economic nature and financial risks involved.
The statement embraces an understanding of agencies technical area, which considered unlawful the investment by investment funds involving virtual currencies, either directly or through derivatives contracts. CVM pointed out risks related to cyber security order, besides the acquisition, negotiation and custody of those assets.
Although the agency has issued such restrictive statement, CVM informed that it is considering the possibility of indirect investment in cryptocurrencies by investment funds, but it recommends that investment funds’ managers wait for final position, in order to avoid risk exposure related to the high degree of volatility and speculation.