Brazil’s Securities Regulator Targets Mercado Bitcoin Over Token Sale

Brazil’s securities regulator has ordered Latin America’s biggest cryptocurrency exchange Mercado Bitcoin to provide information on digital tokens it issued. 

Mercado Bitcoin, the biggest cryptocurrency exchange in the region by volume, needs to give information to Brazil’s Securities and Exchange Commission (CVM) on fixed-income tokens it has sold over the past two years, Estadão newspaper first reported Tuesday. 

The exchange also needs to reveal the amount raised with the tokens and the list of investors who bought them, the report added. 

Estadão’s report didn’t name the tokens but confirmed they were issued on a blockchain and supposedly backed by real-world assets. It added that they were “low risk and high yield”  in “consortium, energy, writs of payments and receivables.”

Mercado Bitcoin told Decrypt in an email that its token sales did everything within Brazil’s regulatory framework. 

It added that it “actively” works with the CVM and Brazil’s central bank to “contribute to the construction of regulations for the sector.” 

“We do not make public offerings of securities outside the scope of the authorizations we hold as an authorized crowdfunding platform and investment manager,” the statement said. 

2TM Group, Mercado Bitcoin’s parent company, has slashed staff following the crypto maket’s sell-off. 

Earlier this month 2TM cut 15% of its staff—just two months after announcing an earlier round of job cuts.

2TM has also slammed Brazilian regulators for not being clear cut with regulating crypto. The company said in a statement this month that the environment in Brazil was “unfair” and “lacking the approval of the legal framework for crypto-activities.” 

Brazil has a booming Bitcoin market: It was the first country in the region to launch a Bitcoin ETF and now has the largest number of crypto exchange-traded funds on the continent. And a report this month by the country’s tax authority showed that Brazil topped one million registered crypto users in July for the first time.