On Friday, January 12, 2018, the Brazilian Securities and Exchange Commission (CVM), responsible for regulating the Brazilian capital market, issued a letter giving directions regarding the investment in cryptocurrencies to the directors responsible for the management and administration of investment funds.

According to the statement issued by the CVM's Institutional Investor Relations Office (SIN), since cryptocurrencies are not included in the definition of financial assets provided by Article 2, Section 5, of CVM Instruction No. 555/14, they can not be considered financial assets, and hence its direct acquisition by regulated investment funds is not allowed.

As for the indirect investment in cryptocurrencies, the letter clarified that this possibility is still being addressed, and advises managers of investment funds to wait for a more conclusive position on the matter. It points out, however, that investment in virtual currencies still carries many risks, including those concerning the future legality of their acquisition or trade. In this sense, Bill No. 2303/2015 can be cited, which is pending in Brazilian Congress and, if approved, “may block, restrict or even criminalize the trade of such modes of investment.”