The Securities and Exchange Commission (CVM) has issued a suspension order against cryptocurrency trading platform Bybit. According to the official statement from the CVM, the suspension order is effective as of this Tuesday (6). According to the Market and Intermediary Relations Superintendence (SMI), ByBit Fintech Limited seeks to attract clients residing in Brazil. However, the company is not authorized to do this type of advertising. The CVM said that Bybit advertises through the aforementioned websites and profiles on social networks, in order to carry out transactions with securities. But without having a license from the municipality, Bybit is not authorized to attract Brazilian customers. “By means of the CVM Declaratory Act 20,123, the Autarchy determined the immediate suspension of any public offering, directly or indirectly, to investors residing in Brazil of investment opportunities in securities”, said the CVM. In short, Bybit will have to suspend its derivatives offerings to Brazilian clients, effective immediately. If the platform does not comply with the CVM’s determination, it will have to pay a fine equivalent to BRL 1,000 per day of noncompliance.
What motivated the ban?
The CVM determined the suspension of Bybit in accordance with Article 15 of Law 6,385/76 – the law that regulates the investment market. According to this law, any company must be registered with the CVM to offer investments to clients residing in Brazil. That is, even if the company is registered in its country of origin, it must also have authorization from the CVM. Otherwise, any advertising of the company in Brazil is classified as “irregular”. In this sense, Bybit offers trading in cryptocurrencies and also derivatives, a product that the CVM classifies as a “security”. It was precisely this point that determined the suspension of the platform, since Bybit could not, according to the CVM, offer these derivatives. This is not the first time that the CVM has suspended the performance of exchanges for offering securities in Brazil. In 2020, the municipality banned Binance from offering futures contracts in Brazil, as reported by CriptoFácil. At the time, the CVM also stated that Binance offered derivatives and securities without authorization from the body. As a result, Binance had to suspend its futures service for Brazilian customers.
Bybit emits positioning
This afternoon, Bybit sent a statement to the market saying that it intends to “amicably resolve” the suspension order with the CVM. “Bybit is taking steps to ensure that we fully understand the regulator’s requirements and demands on our derivatives trading offerings. We will respond accordingly, with the aim of resolving the matter amicably in the best interests of all parties. We are currently unable to comment on an evolving situation,” the exchange said. Read also: Binance to delist USDC, USDP, TUSD stablecoins and liquidate open positions Read also: New UK Prime Minister supports “free regulation” of cryptocurrencies Read also: Ethereum receives Bellatrix update this Tuesday; price goes up 8%