Brazil’s Securities Market Regulator Targets Mercado Bitcoin over Token Sale

The Brazilian Securities and Exchange Commission (CVM), the securities market regulator in Brazil, has ordered Mercado Bitcoin, the largest cryptocurrency exchange in Brazil, to provide information on fixed-income tokens the exchange has issued over the last two years.

According to reports by Estadão newspaper, the capital markets regulator wants to know the amount Mercado Bitcoin raised with the tokens and see a list of investors who participated.

While the report did not reveal the names of the tokens, it confirmed that they were issued on a blockchain and allegedly backed by real-world assets. The report further said the tokens were “low risk and high yield” in “consortium, energy, writs of payments and receivables.”

Mercado Bitcoin has responded to the matter, saying that its token sales fully complied with Brazil’s regulatory framework. The exchange further said it “actively” works with the securities market regulator and Brazil’s central bank to “contribute to the construction of regulations for the sector.”

“We do not make public offerings of securities outside the scope of the authorizations we hold as an authorized crowdfunding platform and investment manager,” Mercado said.

In early this month, the CVM banned the Singapore-based crypto exchange Bybit from brokering securities in the country. On September 5, Bybit was booted out of the Brazilian market over its alleged unregistered securities offering. The country’s securities watchdog ordered the Singaporean exchange to cease operations immediately or face a daily fine.

The CVM alleged that Bybit was seeking to raise funds from Brazilian investors for investments in securities without the company having the authorization to act as a securities intermediary. The regulator argued that only Brazil’s stock exchange B3 is allowed to offer securities in the country.

This month, 2TM Group, Mercado Bitcoin’s parent company, criticized Brazilian regulators for not being clear about regulating cryptocurrency. The company said the current environment in Brazil is unfair and has not yet developed a clear regulatory framework for crypto-activities.

Meanwhile, reports indicate that the CVM is preparing to release an official crypto guide soon but encourages companies to consult the commission before issuing any token that may be considered a security.

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Largest cryptocurrency exchange in Latin America to develop renewable energy tokens

In an announcement to Reuters News on Thursday morning, Brazillian cryptocurrency exchange Mercado Bitcoin said it has signed an agreement with Comerc, one of the main retail energy providers in Brazil, to develop renewable energy tokens. Mercado Bitcoin and Comerc seek to implement two types of tokens.

The first, set to launch in 2022, will be tied to a cashback scheme for solar energy generation. Currently, Comerc customers receive up to 15% to 20% of their electricity bills’ value in cashbacks should they choose to switch to solar energy. The second token will be linked to certificates that document energy consumption from renewable sources.

In a statement to Reuters, Matheus Nogueira, CEO of Nori, a company that distributes energy for Comerc, said the following:

The token can be treated like any other currency, but it has an additional benefit, it is a token that represents a renewable generation.

Meanwhile, an executive linked to the project at Comerc gave the following remark regarding the three “Ds” of the company’s initiative regarding renewable energy:

First, decarbonization, encouraging clean energy; the second is decentralization, our plants are based on distributed generation…, and finally, digitalization.

Mercado Bitcoin claims to be the largest cryptocurrency in Latin America, with more than three million customers. According to CoinGecko, the exchange lists 11 coins and had a trading volume of $19.4 million in the past 24 hours. Earlier this year, Mercado Bitcoin attracted a


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Japan’s SoftBank leads $200 million investment in Brazil’s Mercado Bitcoin

Japan’s SoftBank recently has invested $200 million into the Mercado Bitcoin crypto exchange in Brazil.

Roberto Dagnoni, the CEO and executive chairman of 2TM Group, the parent company of Mercado Bitcoin, revealed that the cryptocurrency exchange plans to utilize the funds to ramp up its business activities, improve its crypto offerings, and make an investment in infrastructure, so that meet the increasing demand for cryptocurrency services in Brazil.

The investment is considered the largest raised through a Series B funding round in Latin America’s history and SoftBank’s largest investment in a crypto firm in Latin America. The 2TM group stated that its valuation hit $2.1 billion as a result of that investment.

Softbank’s investment comes when investors’ interest in crypto assets has increased amid crackdowns imposed by regulators in Japan, Britain, and China. Such crackdowns have resulted in outflows of cryptocurrency investment funds and products in the previous few weeks.

However, Dagnoni was unmoved by the recent crackdown on crypto assets.

In a phone interview with Reuters, Dagnoni stated: “We are strong believers in the fundamentals of crypto.”

Dagnoni further stated: “The platform is quite integrated. So, custody is very important in releasing the power of the institutional market. We’re also looking at regional expansions in Latam and expansions via M&A (mergers and acquisitions) as well.”

Mercado Bitcoin is the largest crypto exchange in Brazil. It established its crypto business operation in 2013. Since then, the firm has experienced significant growth, with customers hitting 2.8 million this year, more than 70% of the entire number of investors in Brazil’s stock exchange.

An estimated 700,000 new clients created accounts to utilize Mercado Bitcoin’s cryptocurrency services between January and May this year. The trade volume at Mercado Bitcoin has risen to $5 billion during the first five months of this year, thus surpassing the entire volume of its first seven years in business operations.

Raining Crypto Funding Rounds

While crypto tokens significantly influence traditional financial and banking systems, such as rising investments in recent months. The entire market value of crypto assets is rising to hit $2 trillion, which could be larger than the market cap of Microsoft, Google, and Amazon.

Despite the recent plunge in Bitcoin prices, big names such as PayPal, Goldman Sachs, JPMorgan, Morgan Stanley, and others have seriously involved themselves and made investments in crypto exchanges. Morgan Stanley and Goldman Sachs became the first leading banks in the US to provide wealthy customers with direct access to Bitcoin services. 

Meanwhile, blockchain technology’s popularity has dramatically grown and attracted more cryptocurrency investors and venture funds into the crypto market. Due to the popularity of crypto coins, blockchain technology is seen moving out of the crypto market and being embraced by other industries. Thus, institutions and venture companies are rushing to try their luck in crypto funding. Such funding assists crypto firms in expanding their operations and gives them the edge to try out executing new activities.


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Largest Exchange In Latin America, Mercado Bitcoin, Raises $200 Million From SoftBank

Major Brazilian exchange Mercado Bitcoin has raised $200 million from SoftBank and will seek to increase offerings and penetrate new markets.

The biggest bitcoin exchange in Latin America, Mercado Bitcoin, has raised $200 million from SoftBank as announced by its parent company 2TM Group. The fundraising is the most significant series B round in the history of Latin America and values 2TM at $2.1 billion — now the eighth biggest unicorn startup there.

“Millions of people around the world are realizing that digital assets and cryptocurrencies are both innovative technologies and efficient stores of value — Brazil is no exception to that trend,” said Roberto Dagnoni, executive chairman and CEO of 2TM Group, in the announcement. “This series B round will afford us to continue investing in our infrastructure, enabling us to scale up and meet the soaring demand for the blockchain-based financial market.”

Mercado Bitcoin plans to use the round’s proceeds, representing SoftBank’s most prominent investment in a cryptocurrency company in Latin America, to increase its scale, expand its offerings and invest in infrastructure to meet demand. The company also plans to penetrate other South American markets such as Chile and Argentina.

Brazil has seen greater involvement in bitcoin trading than it has in traditional securities for a few years now. And according to the announcement, Mercado Bitcoin has processed almost $5 billion in transaction volume in the first five months of 2021 with a client base of 2.8 million — compared to a total of 3.7 million individual investors on the country’s stock exchange.

Marcelo Claure, CEO of SoftBank Group International, also commented on the series B round, saying that bitcoin and cryptocurrencies have “incredible potential in Latin America,” and later adding that SoftBank is “excited to take part in this incredible journey” with 2TM.

The Brazilian bitcoin exchange, founded in 2013, raised this latest investment just five months after its series A round in January 2021. The company’s first round was co-led by G2D/GP Investments and Parallax Ventures and advised by J.P. Morgan. Other firms that also participated in that round include HS Investimentos and Gear Ventures.


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Mercado Bitcoin Lands $200M Investment from SoftBank

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Japanese multinational SoftBank has invested $200 million in the parent company of Brazilian crypto exchange Mercado Bitcoin. 

The Largest Crypto Investment in Latin America

SoftBank is betting big on Mercado Bitcoin. 

The firm’s Latin America Fund announced a Series B investment in the Brazilian crypto exchange Thursday. The investment is the largest for crypto in Latin America’s history, putting Mercado Bitcoin’s parent company, 2TM Group, at a valuation of $2.1 billion. 

With crypto adoption in the region booming, Mercado Bitcoin will use the funds to help meet the growing demand for crypto services. Over the last year, Mercado Bitcoin’s client base has grown to over 2.8 million, with 700,000 new users since the start of 2021. 

Along with expanding Mercado Bitcoin, 2TM Group is launching Bitrust, the first digital custodian in Latin America, subject to regulatory approval.

The funds will be used to invest in infrastructure and scale the business, a press release notes. Commenting on the investment, Roberto Dagnoni, executive chairman and CEO of 2TM Group, said: 

“I am thrilled to have the SoftBank Latin America Fund support to help us to realize our vision, thanks to the unparalleled combination of their financial expertise, in-depth industry experience, and extensive regional footprint.”

Marcelo Claure, CEO of SoftBank Group International and COO of SoftBank Group, added that there’s “incredible potential” for cryptocurrencies in Latin America. “We believe winning in Brazil is critical for 2TM Group and are excited to take part in this incredible journey,” he said. 

Investment in Latin America is gaining momentum as national leaders express enthusiasm for Bitcoin and blockchain technology. Should the interest in crypto continue to gather pace, companies will be incentivized to invest early to avoid getting left behind. Last month, El Salvador became the first country to make Bitcoin legal tender. Other Latin American countries look to be following El Salvador’s example. Paraguay’s Deputy of the Nation Carlos Antonio Rejala Helman also says the country plans to legislate on Bitcoin sometime in July. 

Disclosure: At the time of writing, the author of this feature owned BTC and ETH. 

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Brazil’s top exchange announces international expansion after raising $38M

Brazil’s largest Bitcoin exchange, Mercado Bitcoin, has announced plans to expand across Latin America.

Chief executive Reinaldo Rabelo named Chile, Mexico, and Argentina as among the jurisdictions it will expand into first, comparing the “regulatory culture” in those countries to Brazil’s.

According to Useful Tulips, Mexico is currently the fourth-largest Latin American country by peer-to-peer Bitcoin trade volume, with Chile ranking fifth, and Argentina ranking seventh.

The strong P2P trade volume suggest there may be significant demand from local traders that is not met by centralized platforms.

The announcement comes alongside news of an investment round that saw Mercado Bitcoin raise nearly $38 million from venture capital firms including Parallax Ventures, Evora Fund, and Banco Plural.

Mercado Bitcoin will use some of the funds to invest in regulated custodian Bitrust to cater to institutional investors. The exchange will also invest in digital wallet Meubank, allowing customers to store crypto assets, gaming collectibles, and other digital assets.

Once its ecosystem has been consolidated, Mercado Bitcoin is aiming to become one of the top exchanges worldwide, with Rabelo, stating:

“We want to develop the crypto ecosystem in Brazil and create a market as developed as that of the United States. To do this, we want to be one of the five largest digital exchanges in the world.”

“Our long-term purpose is to participate in the construction of a new infrastructure for the financial market based on blockchain, smart contracts, and crypto assets,” he added.

Despite being among Latin America’s top exchanges by volume — having hosted more than $3.7 billion in trade since launching in 2013 — the exchange has almost exclusively operated in Brazil. The platform’s user base has doubled in the last two years from roughly one million to 2.2 million.

The exchange aims to surpass a user base of 3 million and expand its team from 200 to 300 in 2021.


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