The Brazilian Securities and Exchange Commission issues a suspension order to Kaarat Limited. Companies and individuals identified by the regulator as users of Kaarat Limited may receive daily fines of R$ 1,000.00. The Brazilian SEC determines immediate suspension of public offers of securities intermediation services.
The Brazilian Securities and Exchange Commission issued a suspension order – meaning a warning of irregular action – and suspended any operations of Kaarat Limited. This is because the company is not authorized to broker securities or raise funds from investors for investments in securities in Brazil.
With a registered address at 180 Kingstown, Saint Vincent and the Grenadines, the platform offers trading in digital currencies, including Bitcoin, Ripple and Ethereum. On its website, Kaarat offers investment “opportunities” in global stocks, commodities, indices and cryptocurrencies, with a minimum investment of $250.
Brazil: Daily Fine of R$ 1,000.00
The Superintendence of Market and Intermediary Relations (SMI) of the Brazilian CVM stated the following:
“Evidence was identified that the company, which uses the Kaarat brand, seeks to attract clients residing in Brazil to carry out securities transactions, through the website www.kaarat.com. The company Kaarat Limited does not have authorization from the CVM to broker securities or raise funds from investors for investments in securities.”
The authority’s alert was made through Declaratory Law 21,928 of the CVM and is also valid for the public and the market in general. Companies and individuals identified by the regulator as users of Kaarat Limited. – whether through websites, applications or social networks – can receive daily fines of R$ 1,000.00.
Brazil: Immediate Suspension
According to a publication in the Official Gazette on April 4, the law determined the “immediate suspension of any public offer, direct or indirect, to investors residing in Brazil of investment opportunities in securities.”
“Through Declaratory Law 21,928 of the CVM, the Authority ordered the broker to immediately suspend any public offer of securities intermediation services, directly or indirectly, including through websites, applications or social networks, for not integrating the distribution system. provided in art. 15 of Law 6,385”, details the statement.
The regulator advises that people who receive an investment proposal from Kaarat communicate it through the Citizen Service (SAC), providing information and identification of the people involved.
On the Kaarat website there is a risk notice with a warning that more than 70% of accounts lose capital. Especially when trading derivatives. The platform’s services include more than 300 global stocks, energy sector commodity contracts such as oil and natural gas among the 1,200 products offered.
Kaarat does not currently operate in countries such as the United States, Iran, Iraq and North Korea. A statement from the CVM requests investors or any citizen who receives investment proposals from Kaarat Limited to contact the authority.
About the Order Issued by the Brazilian CVM
“The issuance of a stop order is a precautionary measure to prevent or correct abnormal market situations detected by the Authority. Therefore, it should not be confused with penalizing the right people. In the case of infractions, the sanction requires the conclusion of an administrative sanctioning process with a sentencing decision,” explains the Brazilian CVM.
Bitcoin is legal in Brazil, and there are no restrictions on individuals buying, selling, or using cryptocurrencies for non-criminal purposes. There are no taxes levied on bitcoin transactions, but gains of over R$ 35,000 per month are taxed at capital gains rates.
By Audy Castaneda
