Brazil has granted permission to the investment funds to purchase Bitcoin (BTC). Comissão de Valores Mobiliários (CVM) has authorized the investment funds to park funds in the cryptocurrency ecosystem. The Brazilian securities regulator has indirectly allowed investments via foreign funds or derivatives. According to Portal do bitcoin, Brazilian Finance Ministry Says ‘Investment Funds Can increase exposure to regulated funds in other jurisdictions’.
Invest only in regulated funds
The foreign funds should hold cryptocurrencies such as Litecoin (LTC), Ethereum (ETH), and Bitcoin to accept investments from Brazilian funds. According to a circular of the Ministry of Finance, the funds are directed to invest in cryptocurrencies via regulated exchanges. It is to prevent the scope for fraudulent or money laundering activities in the cryptocurrency space.
Safety Precautions Before Investing
The funds are advised not to buy tokens issued by the fraudulent ICOs. It is necessary to ascertain whether the technology of foreign funds is verifiable by any customer, accessible, and transparent. The investors should also see that foreign funds should have ample liquidity. Also, the arrangements should not have any conflicts of interest. They should not indulge in aggressive sales techniques.
To ensure the right price of the crypto asset, the investors need to read third party prepared worldwide recognized price indices. Daniel Maeda, the superintendent (institutional investor relations) at CVM, said investment funds cannot park their directly in cryptocurrencies.
Grupo XP to Launch Crypto Trading Platform in Brazil
Enthused by the favorable framework of the Brazilian Government, Brazil based biggest independent brokerage is planning to establish the trading platform. Grupo XP will establish a trading platform by the end of 2018 to promote trading of cryptocurrencies Ethereum and Bitcoin.
CADE (Administrative Council for Economic Defense), the anti-trust watchdog, has ordered a probe to know whether banks are harming crypto. The watchdog will conduct a detailed investigation to promote fair trading of the cryptocurrencies.
Despite all these favorable measures, the Brazilian government has sent a 14 point questionnaire to the local cryptocurrency exchanges. It helps to identify the fair practice of the businesses and find the possible use for money laundering activities. The government can take measures to prevent money laundering activities.