Brazilian regulator to ban Bitcoin mining investments

Baozou Commentary : The Brazilian government has always disapproved of the development of cryptocurrencies, and the central bank governor has even called Bitcoin a pyramid scheme. Recently, the Brazilian Securities and Exchange Commission ordered the suspension of HashBrasil's operations, pointing out that this is a securities issuance project related to Bitcoin mining business, but it has not been registered with relevant institutions.

Translation: Annie_Xu

Brazil’s Securities and Exchange Commission (CVM) has begun taking steps to suspend securities offerings related to local Bitcoin mining operations.

In a statement on Feb. 28, the agency announced that the HashBrasil offering was marketed to investors without a license, noting that its promotional activities were conducted on social media channels, including Facebook and Twitter.

“The agency has determined that the company and the individuals mentioned above publicly offered an investment opportunity related to the quota of the Bitcoin mining company HashBrasil and called on the public to enter into contracts that may fall under the concept of legal securities.”

The agency also threatened to fine HashBrasil operators 5,000 reais per day, or about $1,500, if the company fails to terminate the project.

Indications are that the warning almost destroyed the project. The team behind HashBrasil said in a Facebook message on March 1 (the day after the CVM’s statement) that it had suspended all activities in accordance with the relevant statement.

"We will publicize the steps we will take to protect the interests of our customers, and we will do so in a lawful and routine manner."

In the past, Brazilian regulators have generally been unfavorable to cryptocurrencies, including criticism from the country’s central bank, which in October last year said it believed Bitcoin was a pyramid scheme.