What the CVM does — and why it protects you

Almost every text about tokenization in Brazil cites the acronym CVM. Before understanding the resolutions, it's worth understanding the institution — because its logic explains the logic of everything else.

The Comissão de Valores Mobiliários (CVM) — Brazil's securities regulator, the local equivalent of the U.S. SEC — is a federal agency created in 1976 that regulates and supervises the Brazilian capital markets: the environment where companies and projects raise money from the public and where investors buy stakes, debt instruments and funds. Think of it as the traffic authority of that market: it sets the rules of the road, supervises the drivers and penalizes whoever puts others at risk.

What is a "security"?

The key concept in the CVM's world is the security (valor mobiliário) — in simple words, an investment offered to the public where the investor hands over money expecting returns that depend on someone else's effort. Company shares, fund quotas, publicly offered debt instruments: all of these are securities.

The definition matters because it is the regulation's on/off switch: if something is a security, offering it to the public must follow CVM rules. The format doesn't matter — paper, electronic system or token. The "digital" label does not flip the switch off.

Why regulation exists

It's tempting to see regulation as red tape. The history of capital markets tells a different story: it exists because, without rules, whoever sells an investment knows far more than whoever buys it — and that asymmetry turns into abuse with statistical regularity.

CVM rules attack exactly that:

• Mandatory disclosure: whoever offers has to say what they are selling, risks included — not just the promises.
• Limits and profiles: certain offerings can only be made to certain audiences, or up to certain amounts per investor.
• Accountability: there is an identifiable responsible party when the rule is broken.

For the investor, that is protection. For whoever structures a serious issuance, it is something equally valuable: credibility. Operating within the rules is what separates an investment instrument from a bet with a nice narrative.

And what does this have to do with tokens?

Everything. When a token represents a security — a fraction of debt, a fund quota, an instrument — its offering follows CVM rules, like any other. Tokenization changes the asset's record, not its nature. This is a principle you will see repeated throughout this trail, because it is the principle that separates serious projects from shortcuts: the rail changes, the rule remains.

The opposite also matters: not every token is a security. A carbon or renewable-energy certificate, for example, is an environmental asset, with its own legal framework. Each asset follows the rule of its nature — and identifying that nature is a central part of structuring well.

The two resolutions you will hear most

In the tokenization context, two CVM rules come up all the time, and the trail dedicates a text to them:

• CVM Resolution 88 — governs smaller public offerings (up to R$ 40 million per issuer), conducted through registered electronic platforms, under a simplified regime. It is the most direct path for smaller issuances.
• CVM Resolution 175 — the framework for investment funds, the structure for larger institutional products.

The next step in the trail is the legal structure that sustains the backing — the SPE, the vehicle behind the token — followed by the detail of Resolutions 88 and 175.

This text is informational and does not constitute legal advice.