CVM Prohibits ByBit From Operating in Brazil

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Altcoins
CVM Prohibits ByBit From Operating in Brazil

The Brazilian Securities and Exchange Commission (CVM) barred Singapore-based crypto exchange Bybit from operating in securities brokerage on September 6. This is not the first time a foreign crypto exchange seeking to operate in Brazil has been publicly warned about its actions.

Brazil’s New Securities Trading Prohibited CVM Cautions Against Bybit

In 2020, Binance, the world’s largest crypto exchange, received a warning from the CVM for its offer to trade on the futures and derivatives market without authorization.

Following the notification, the broker altered all its settings and discontinued derivatives services for Brazilians. In a recent announcement, the CVM stated that Binance had met all of the requisite conditions and that the business in Brazil was no longer a problem.

It is important to remember that the CVM supervises the derivatives market, investments, futures market, and other areas. Before entering into spot market discussions, the autarchy has stated that it is waiting for legislation to be adopted so that the Central Bank of Brazil can check the enterprises.

The CVM issued a warning against Bybit on Monday, similar to Binance two years ago, noting that the platform provides securities services in Brazil.

CVM ordered the suspension of ByBit’s public provision of any securities intermediary services, directly or indirectly, to Brazilian consumers, including through the use of websites, applications, or social networks, in a statement issued on Monday.

The Broker is Yet to Respond

Bybit had not yet publicly reacted on its social networks or blog as of Monday afternoon. However, if the CVM’s recommendations are followed, the exchange may continue to offer its services on the spot market, as Binance has done in the past.

Livecoins has contacted Bybit and is awaiting the company’s response. The article is still being updated. According to CVM, ByBit is not authorized to act as a securities intermediary. Only the Brazilian stock market B3 can provide securities in Brazil.

It is alleged that ByBit was trying to raise cash from investors resident in Brazil for investments in securities Without being authorized to function as a securities intermediary, The sole institution permitted to intermediate securities in the South American nation is Brazil’s B3 securities exchange.

The CVM also stated that ByBit must comply with the prohibition immediately or face a daily fee of 1,000 Brazilian reals (equal to $194).

Bybit has established itself as one of the most reliable crypto exchange platforms in Europe and Asia. The exchange claims to have created the necessary liquidity for the Brazilian crypto space, with an estimated 6 million daily active users (dau) and $10 billion in trading volume.

Past Events

In April, Bybit announced that it would allow Brazilian users to purchase cryptos using Brazilian reals and launch earning goods and a non-fungible token (NFT) marketplace.

However, ByBit told CoinDesk InfoMoney in June that it was actively monitoring the Brazilian crypto regulatory debate to adopt the best possible strategy and avoid a replay of the Binance situation, which the CVM halted in 2020.

Wayne Jones

Wayne is an all-rounded cryptocurrency writer who has written for several publications in the fintech industry. Having graduated from the University of Essex Colchester, he developed a passion for blockchain technology and has been curious about how the blockchain can modify the traditional financial industry.