Bitcoin Mining Group HashBrasil’s Operation Suspended By Brazilian Regulator

News, Regulation | March 7, 2018 By:

The Securities and Exchange Commission (CVM) of Brazil has suspended the securities offering of HashBrasil, a local bitcoin mining investment firm.

In an official statement dated February 28, CVM said the services offered by HashBrasil and methods of attracting clients violate the legislation in the sphere of securities.

“The [Authority] has identified that the company and its CEO, Leonardo Janiszevski, 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.”

The CVM said that a fine of R$5,000 ($1,500) per day would be imposed on the operators of HashBrasil if they fail to comply with the suspension.

Soon after the order was issued, Janiszevski announced in Facebook that HashBrasil has temporarily suspended its activities.

“We hereby inform that pursuant to CVM Resolution 790, published on the date of yesterday, (02/28/2018), we temporarily suspend our activities for new business,” said Janiszevski. “We will be informing the measures that will be adopted by us for the defense and preservation of the interests of our clients, always in a regular and legal way.”

Earlier in 2017, the CVM announced that cryptocurrencies associated with certain initial coin offerings (ICO) fit its definition of securities, and said that entities that offer them would be subject to penalties. Last month, it prohibited local investment funds from investing in cryptocurrencies.

“We consider it appropriate for managers and investment funds to await further and more conclusive manifestation of this oversight on the subject to structure the indirect investment in cryptocurrencies as described, or even in other alternative forms that seek this kind of exposure to risk,” the regulator said at the time.