The Securities and Exchange Commission (CVM) of Brazil are suspending the unauthorized Bitcoin Mining investments.

The official statement was made public on CVM’s website and had the purpose to alert users about the suspension of Bitcoin mining company- HashBrasil. The reason was that the company does not have a license to enable engaging in activities conducted on the crypto market. The person in charge of this is not registered as a Securities Issuer, so he has no right to continue the Bitcoin Mining activities.

According to the translation version of the CVM’s official statement, “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”.

The HashBrasil’s CEO may pay a fine of R$ 5,000

The Securities and Exchange Commission has mentioned in the official statement that if Leonardo Janiszevski does not meet his obligations as CEO of HashBrasil, he will have to pay a fine of R$ 5,000 per day, which is approximatively $ 1,500.

The CEO of HashBrasil have announced the company’s users about the temporary suspension via a post on Facebook: “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. 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.”

The Brazilian authorities have criticized and overlooked the cryptocurrency usage in the past. For example, by the end of 2017, the Central Bank‘s Chief stated that he thinks Bitcoin “is a pyramid scheme”.

Brazil is characterized by a strict system of supervision of financial activities carried out on the national market. Thus, any violation of the regulations in force leads to suspension of activities.