Brazilian Regulators Move to suspend HashBrasil Mining Operation

Brazil Regulators to Block Bitcoin Mining Investment

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  • CVM suspends operations of HashBrasil, a local bitcoin mining investment.
  • CVM claims the group issues contacts that may be included in the legal concept of security.

Brazil: The Securities and Exchange Commission of Brazil (CVM) has moved to stop the offer of securities related to HashBrasil, a local bitcoin mining investment.

Also read: Take Special Risk Measures When Dealing In Cryptocurrency – Austrian Regulator

CVM in a statement in Feb. 28 declared that the security offering for HashBrasil being offered to investors was unauthorized, identifying how HashBrasil took to the social media channels, including Facebook and Twitter to make its solicitations. The regulator’s statement reads (translated roughly from Spanish):

“The [Authority] has identified that the company and the individual mentioned above are publicly offering…an investment opportunity related to quotas in [a] bitcoin mining investment group (‘HashBrasil’), using appeal to the public for the conclusion of contracts that may be included in the legal concept of security.”

More so, the security regulator also threatened to levy a fine of R$5,000 (about $1,500) per day on the operators of HashBrasil if they failed to comply with the suspension.

There are indications that the warning has actually thwarted the project. In a Facebook post on March 1, the day following the initial statement of the security regulator, the team behind HashBrasil notified that they had temporarily stopped their activities in light of the posting. The notice reads

“We will be informing the measures that will be taken by us to defend and preserve the interests of our customers, always in a regular and legal way.”

Brazilian regulators have struck a largely dismissive tone on cryptocurrencies in the past, including critical comments from the central bank of Brazil. For instance, last October, Ilan Goldfajn, the central bank chief stated that he believes bitcoin is a pyramidal scheme.

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