Cryptocurrencies continue to create controversy and raise discussions in the legal world. The Securities and Exchange Commission (“CVM“) has already taken a position, in the recent past, regarding the prohibition of the direct acquisition of cryptocurrencies by regulated investment funds, under the pretext of uncertainty regarding the legal nature that permeates the very essence of this type of “currency”. The discussion that is now proposed concerns the use of digital currencies in operations of acquisition and/or sale of ownership interest held in Brazilian companies.
In this sense, the current Brazilian legislative and jurisprudential conjuncture prevents cryptocurrencies from being qualified as “currencies” per se, because they do not enjoy two essential characteristics for this: (i) legal tender, which define currencies as the exclusive means of payment; and, (ii) the forced course, when the impossibility of converting the monetary value into another value, of another kind, is verified.
Still contributing to the degree of vagueness of the legal nature of cryptocurrencies, the CVM, in a note published in October 2017, understood that in some very specific cases, when the requirements indicated in the applicable legislation are present[1]cryptocurrencies would be covered by the concept of securities and, consequently, subject to the existing specific legal regime.
However, considering the degree of specificity of the application of the securities legislation as seen above, for the other applications of cryptocurrencies, more common in everyday life, especially with regard to their trading, it is concluded that they should be treated as intangible assets, since they do not enjoy material, tangible existence, but have eminently economic value, recognized by the market.
In this sense, if considered as intangible assets, cryptocurrencies will also be exchangeable, pursuant to article 533 of the Brazilian Civil Code. In this way, from a corporate and contractual point of view, it is possible for a partner or shareholder to exchange his or her equity interest in digital currencies. There is no impediment in the provisions of the specific corporate legislation[2] regarding the payment of the capital stock of companies with the use of cryptocurrencies.
These legal provisions determine that the company’s capital stock must be expressed in Brazilian currency, and there is no prohibition for paying up this capital with assets, as long as they can have their value assigned in currency.
Nowadays, Brazilian companies already pay-in capital through capitalization of intangible assets such as trademarks, patents, software, among other intangible assets; therefore, there would be no impediment, a priori, to do so through cryptocurrencies.
We conclude, preliminarily, that despite the existing impasse as to the definition of the legal nature of cryptocurrencies, the use and operation of digital currencies in transactions of sale of equity interests of Brazilian companies is feasible, as well as the payment of capital with the contribution of cryptocurrencies, provided that the dictates of the applicable corporate law are respected in any case.
[1] Article 2, IX of Law No. 6.385 of December 7, 1976 – provides for the securities market and creates the Securities Commission. Available at: <http://www.planalto.gov.br/ccivil_03/Leis/L6385compilada.htm> Accessed: 25.05.2018.
[2] Article 7 of Law No. 6404 of December 15, 1976 – provides on Joint Stock Companies. Available at: <http://www.planalto.gov.br/ccivil_03/Leis/L6404compilada.htm> Accessed on: 25.05.2018; and Article 997, III of the Brazilian Civil Code – Law No. 10,406 of January 10, 2002 – Institutes the Civil Code. Available at: <http://www.planalto.gov.br/CCivil_03/Leis/2002/L10406compilada.htm> Accessed: 25.05.2018.