Bybit Exchange Stops Cryptocurrency Activities in Brazil

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Brazilian Securities and Exchange Commission (CVM) imposed a ban on the activities of the Bybit trading platform, accusing it of unlicensed distribution of securities.

The regulator's order states that the exchangeis obliged to suspend all services and operations for storing and trading cryptocurrencies. The ban applies to the trading platform itself, its website, applications and exchange information channels on social networks and instant messengers. Since the ban, the platform cannot directly or indirectly provide cryptocurrency services to Brazilian citizens. The watchdog accuses Bybit, which provided spot and derivatives trading services, of seeking to attract investment as an intermediary without proper CVM securities clearance.

CVM has previously stated that derivative contractsrepresent securities - regardless of the underlying assets. The regulator demands that Bybit immediately comply with the ban, otherwise the platform will face a daily fine of 1,000 Brazilian reais ($194). In Brazil, foreign issuers can only trade securities on local exchanges under CVM rules, and only the Brazilian B3 Stock Exchange can offer securities for purchase.

In 2020, the Binance trading platformfaced a similar situation: it was told to stop trading crypto derivatives on its Brazilian platform. According to the regulator, Binance Futures attracted Brazilian users through the website binance.com, offering them its services for trading cryptocurrency derivatives. However, Binance did not have the necessary permission to do this, so the exchange could not act as an intermediary for conducting securities transactions in Brazil. Binance will try to re-enter the Brazilian market this year by acquiring Brazilian securities broker Simpaul Investimentos, licensed by the Brazilian Central Bank and the Securities and Exchange Commission.