A subpoena was recently sent to Mercado Bitcoin by the Brazilian Securities and Exchange Commission (CVM) to ask about the services that the exchange offers related to fixed return investments of crypto.
The biggest exchange in the country will now be required to provide details about these investments and if it plans on making them available to the general public.
Fixed Income Token Investments
Latin American countries are dealing with extremely high inflation numbers and crypto exchanges operating in these regions are offering some bank-like products to draw people into the crypto market.
One of the biggest crypto exchanges that currently operates in Brazil is known as Mercado Bitcoin and it has recently been subpoenaed by the country’s Securities and Exchange Commission (CVM).
This subpoena is in regard to the services that Mercado Bitcoin is offering through its platform. It has specifically inquired about the services that are offered in the Tokens section of the Mercado Bitcoin webpage.
According to the CVM, this section offers clients a way to diversify their portfolio by promising them high yields and low risk in various areas.
Customers are able to access these tokens with a number of stablecoins and they are offering a higher yield, as compared to normal savings products, in a short time span.
Subpoena details
The CVM has demanded that Mercado Bitcoin provide key information about exactly how these tokens work.
The exchange will have to provide details about the identities and number of customers who have made investments in these products from January 2020 onwards.
Moreover, the crypto exchange would also have to announce if it plans on offering these tokens to clients in the future as well.
If the CVM comes to the conclusion that the products are irregular and the exchange decides to continue offering them, then it could end up facing sanctions.
Mercado’s response
However, it should be noted that Mercado Bitcoin has asserted that it is not offering any kind of irregular services to its customers.
The company elaborated in a statement that it has not conducted a public offering of securities that fall outside the authorizations that they have obtained.
It said that it operates as an investment manager and crowdfunding platform and that it takes the utmost precautions to not infringe on any action of entities that are authorized.
It also clarified that before it had begun offering the tokens in question in 2020, it had made the effort to consult about their structure.
Nonetheless, this appears to be the latest in a series of problems that Mercado Bitcoin has experienced this year.
The company had carried out two lay-off rounds this year alone, with the first one in June and the last one executed this month.
Last year, Mercado Bitcoin carried out a Series B funding round in which it managed to raise a sum of $200 million, with Softbank taking the lead.
The valuation of the company had touched $2 billion after the funding round.