Brazil's capital markets regulator, the Comissão de Valores Mobiliários (CVM), has repositioned the country as one of Latin America's most consequential venues for tokenised investment structures. A fund manager exploring tokenised exposure to digital assets in Brazil faces a concrete choice: structure inside the regulated CVM regime, accept the compliance build that entails, or route capital through an offshore vehicle and expose the fund to cross-border tax drag and investor-eligibility constraints that erode economics before the first trade settles. The wrong domicile decision is not correctable cheaply. This page sets out the regulated basis for tokenised fund structuring in Brazil, the process a manager follows, the cross-border interaction with tax and banking, and the decision point at which counsel adds the most value.
What is the regulated basis for tokenised funds in Brazil?
Tokenised fund structuring in Brazil rests on a CVM regulatory infrastructure that has been materially updated to accommodate digital-asset investment vehicles. The CVM, Brazil's securities regulator, regulates collective investment schemes and has issued specific guidance addressing crypto-asset allocation within fund structures. Under the applicable CVM framework, funds investing in crypto assets – or issuing tokenised quotas – must satisfy classification, disclosure and custody requirements that go beyond those of a conventional securities fund. The regime does not treat a digital-asset fund as a carve-out from securities regulation; it treats it as a regulated fund with an extended asset-class scope. That framing matters for domicile planning: a structure that sits outside the CVM perimeter cannot lawfully distribute to Brazilian investors and cannot access the domestic custody and settlement infrastructure that institutional allocators require.
The CVM framework draws a working distinction between a fund that holds crypto assets and a fund whose quotas are themselves tokenised on a distributed ledger. Both raise compliance questions, but the second – a tokenised quota – introduces an additional layer: the blockchain on which the quota is recorded must interface with the fund's registrar and transfer agent obligations under CVM rules. Operators we advise routinely underestimate that interface requirement. The registry, the transfer agent and the blockchain settlement layer need coordinated legal documentation before the first subscription closes. Where that documentation is incomplete, the CVM has the authority to require remediation, suspend distribution or impose administrative sanctions.
Brazil's broader digital-asset legal environment also matters. The Brazilian Central Bank (Banco Central do Brasil, BCB) holds supervisory authority over payment arrangements and virtual-asset service providers under the country's crypto regulatory law, enacted in 2022 and progressively implemented. A fund that operates its own settlement or redemption layer – processing token transfers directly – may cross into payment-service territory regulated by the BCB, not only the CVM. The boundary between those two regulatory perimeters is a live structuring question in our practice, and the answer turns on how redemptions, secondary transfers and custody flows are engineered.
Who needs a structured tokenised fund vehicle in Brazil?
Any manager directing pooled capital into digital assets and accepting Brazilian investors into the pool should consider whether a CVM-regulated structure is necessary or strategically advantageous. The question is not academic. Brazilian institutional allocators – pension funds, family offices, multi-manager platforms – can only invest through vehicles that satisfy CVM rules. A manager domiciled offshore with no regulated Brazilian feeder forecloses that capital base entirely.
The profiles we see most frequently fall into three categories. First, a Brazilian fund manager seeking to offer tokenised exposure to domestic high-net-worth investors. Second, an international manager with existing offshore digital-asset fund infrastructure that wants to create a regulated Brazilian feeder or parallel vehicle to access local capital. Third, a Web3 project or token issuer exploring whether a CVM-regulated structure can replace a simple token sale as the primary capital-raising mechanism. Each profile raises a distinct structuring question, and each has a different answer on domicile, custody and manager licensing.
CTA: The process above describes the standard path. Your facts – the entity, the investor base, the asset mix – change the analysis materially. For a scoped assessment of your tokenised fund structure in Brazil, contact OBOLUS at info@oboluslaw.com.
What does the structuring and authorisation process involve?
Structuring a tokenised fund in Brazil is a sequential process with interdependent regulatory, legal and technical stages. The CVM authorisation pathway requires the manager to establish the fund as a Brazilian legal entity (typically a fundo de investimento under the applicable CVM normative), appoint a regulated administrator and custodian, prepare the fund's constitutional documents and prospectus, and submit a registration filing to the CVM. For funds with a crypto-asset allocation above the permitted incidental threshold, additional disclosure obligations apply: the prospectus must describe the digital-asset strategy, the custody arrangement and the valuation methodology for illiquid or thinly traded tokens.
In our cross-border practice, the steps that most commonly generate delay are the custodian appointment and the technical integration between the fund's quota registry and the blockchain settlement layer. Brazilian custodians authorised to hold crypto assets operate under BCB and CVM supervision simultaneously. Not every major custodian has built the operational infrastructure for tokenised quotas. Managers should expect to spend material time on custodian selection and on negotiating the service-level parameters before the CVM filing is ready. From a complete filing, CVM review timelines vary by fund category and by the complexity of the asset strategy; the CVM has indicated responsiveness to well-prepared submissions, but managers should plan for a multi-week review period and potential requests for supplementary information.
The tokenisation layer itself – if quotas are to be recorded on a distributed ledger – requires a technology legal opinion addressing the legal equivalence of the on-chain record with the fund's official register, the governance of the smart contract, and the mechanism for correcting errors. That opinion is not a CVM form; it is a structuring deliverable that the administrator, the custodian and the transfer agent all need to see before they will sign their engagement letters. We produce this opinion as part of the structuring mandate, coordinating with allied counsel in Brazil on the local civil-law and capital-markets analysis.
How does the cross-border tax and banking layer interact with the structure?
For a Brazilian fund with international investors, the tax and banking interaction is where structural decisions carry the largest economic consequence. Brazil taxes income from financial investments at rates that depend on holding period and fund category; the applicable withholding rates for non-resident investors are set by Brazilian tax law and vary by treaty status and asset class. We do not state those rates as fixed figures here – they are subject to legislative change and require current analysis from qualified Brazilian tax counsel – but the practical point is that the difference between a well-structured and a poorly structured vehicle can run to a material percentage of returns annually.
The cross-border banking question is equally concrete. A tokenised fund that holds stablecoins or other digital assets alongside traditional securities faces FX regulation under BCB rules: the movement of proceeds between the fund's Brazilian entity and any offshore master or feeder is a capital flow subject to BCB reporting and, in some structures, BCB prior authorisation. Operators we advise routinely discover this constraint after they have committed to an architecture that requires regular inter-entity settlement. Identifying it at the structuring stage – before the subscription agreement is drafted – avoids a costly rebuild.
For managers with an offshore GP or management entity sitting above a Brazilian fund, the transfer-pricing and thin-capitalisation rules that apply to service fees and carried interest between related parties add another dimension. Brazil's transfer-pricing rules have been modernised in recent years toward OECD standards, but the practical application to crypto fund fee arrangements remains an area where current local advice is essential. In our structuring work, we coordinate that analysis with allied counsel in Brazil from the outset, not as an afterthought to the fund formation.
Which structure suits which manager profile?
The right vehicle depends on three variables: the investor base, the asset strategy and the manager's existing regulatory footprint. A decision made without mapping all three typically produces a structure that is either over-engineered (carrying compliance cost the investor base does not require) or under-engineered (foreclosing institutional capital the manager wants to raise).
Profile A – Brazilian manager, domestic HNW/family-office investors, diversified crypto-asset allocation. The natural vehicle is a CVM-regulated fund with a crypto-asset allocation permitted under the applicable CVM normative, custody held with a Brazil-authorised custodian, and tokenised quotas if the manager's distribution platform supports on-chain secondary transfer. Timeline from engagement to first close: typically a matter of months, subject to custodian readiness and CVM review pace. Key risk: custodian selection – not every institution has the operational infrastructure for digital assets at scale.
Profile B – International manager, offshore fund already operating, seeking Brazilian institutional investors via a local feeder. The vehicle is a CVM-regulated feeder that subscribes into the offshore master, with a local administrator and a local custodian holding the feeder's assets (typically cash or stablecoins pending investment). The feeder structure adds a layer of filing and ongoing reporting, but it is the only route to regulated access to Brazilian pension and insurance capital. Key risk: the feeder's investment mandate must describe the master's digital-asset strategy in terms that the CVM considers adequate disclosure.
Profile C – Web3 project or token issuer, exploring a CVM-regulated capital raise via a tokenised fund rather than a direct token offering. This is the most structurally complex profile. The fund must be designed so that the quotas are genuinely investment instruments and not a thin wrapper around what would otherwise be a securities offering. CVM scrutiny of this structure is active; a prior no-action or formal consultation with the CVM is advisable before committing to formation costs. Key risk: reclassification of the token or quota as a security under a framework the structure was not designed to satisfy.
If a prior structure stalled or an application drew CVM comment that was not resolved, a second read can surface the structural reason and the route forward. Write to OBOLUS at info@oboluslaw.com or reach us via t.me/oboluslaw.
A recent structuring matter
In a recent cross-border matter, an international digital-asset manager sought to establish a Brazil-domiciled feeder fund to access local family-office capital. The existing offshore structure held a diversified portfolio of liquid tokens and tokenised private credit instruments. The challenge was that the feeder's proposed custodian had not yet built operational support for the private credit tokens, creating a gap in the custody chain that the CVM's disclosure requirements would expose. We worked with allied counsel in Brazil to restructure the asset custody split – liquid tokens in the offshore master, a bifurcated sub-account for the tokenised credit instruments – and to document the technology opinion confirming the legal equivalence of the on-chain quota record. The feeder reached first close in a subsequent quarter with a capital commitment from two Brazilian single-family offices.
What are the most common structuring mistakes?
A common assumption is that any offshore vehicle works equally well for a digital-asset fund. In practice, that assumption produces three recurring and expensive problems. First, an offshore-only vehicle cannot accept Brazilian institutional capital, because the investor's own investment policy requires CVM-regulated counterparties. The manager loses access to a significant allocation pool without knowing it until a term-sheet conversation surfaces the issue. Second, an offshore vehicle holding stablecoins that redeems in fiat to Brazilian investors may trigger BCB payment-service rules, creating an unlicensed-activity exposure. Third, an offshore vehicle that issues tokenised interests to Brazilian residents may be making a public securities offering in Brazil without CVM authorisation – a regulatory breach carrying administrative sanctions and potential criminal exposure for the manager.
The corrective action after any of these three problems arise is more expensive than the preventive structuring. A CVM authorisation obtained before the first Brazilian investor subscribes costs a defined amount of time and legal work. Remediation after an enforcement inquiry costs multiples of that, plus reputational friction with the very institutional investors the manager was trying to reach.
A further practical point: the fund's AML/KYC framework must satisfy Brazilian standards under the applicable anti-money laundering legislation, not merely the offshore domicile's standards. For a fund accepting Brazilian investors, the BCB and CVM both expect the fund's administrator to apply Brazilian investor identification and source-of-funds procedures. Operators who assume that Cayman or BVI-standard KYC satisfies the Brazilian requirement routinely find, during the administrator's onboarding review, that Brazilian investor files need to be rebuilt from scratch.
Related at OBOLUS
Related at OBOLUS
- Funds & Investment Vehicles for Digital-Asset Businesses – the full OBOLUS practice covering crypto fund formation, structuring and regulation across jurisdictions
- Redemption and Liquidity Terms for Early-Stage Founders – structuring redemption mechanics and liquidity provisions for digital-asset fund managers at launch
- MiCA Whitepaper Review in Singapore – cross-border whitepaper review for crypto-asset issuers with dual EU and Singapore regulatory exposure
FAQ
Where should a crypto fund be domiciled?
Domicile should follow three variables: where the target investors are regulated, where the assets will be custodied, and what tax treatment applies to the fund's income and redemptions. There is no universally optimal domicile. A fund targeting Brazilian institutional investors typically requires a CVM-regulated Brazilian vehicle or a regulated feeder. A fund serving only offshore professional investors may suit Cayman, BVI or Singapore. Matching domicile to investor base and asset mix is the starting analysis, not a secondary consideration.
Does a digital-asset fund manager need a licence?
In most regulated jurisdictions, managing a collective investment scheme requires either a manager licence or an authorised administrator acting on the manager's behalf. In Brazil, the fund administrator and portfolio manager are distinct regulated functions under the CVM regime; an international manager without a Brazilian CVM registration must engage a CVM-authorised local administrator and portfolio manager to operate legally. The licensing requirement applies regardless of whether the fund holds conventional securities or digital assets.
How is custody arranged for a crypto fund?
Custody for a CVM-regulated fund investing in digital assets must be held with a custodian authorised under the applicable Brazilian regulatory framework. Not every major custodian has operational infrastructure for tokenised assets. For tokenised quota funds, the custody arrangement must also address the relationship between the on-chain record and the fund's official register. Offshore funds holding digital assets on behalf of Brazilian investors face a parallel question under BCB rules governing cross-border asset flows. Custody selection is a structuring decision, not an administrative one.
About OBOLUS
OBOLUS is an independent digital-asset law boutique acting only for businesses. We advise exchanges, custodians, token issuers and funds on licensing across 70+ jurisdictions, on disputes and on-chain asset recovery across 25+ forums, and on the tax, banking and compliance that sit around them. We match domicile to investor base, asset mix and redemption profile – and we coordinate with allied counsel in the relevant jurisdictions from the outset. Digital assets are the whole of our practice. To discuss your tokenised fund structure in Brazil or elsewhere, contact info@oboluslaw.com.
By Lydia Brennan, Tax & Structuring Analyst – specialising in cross-border digital-asset fund structuring, tax treatment of tokenised investment vehicles and the interaction of fund domicile decisions with investor-eligibility and capital-repatriation rules.
This publication is general information about the law and does not constitute legal advice. It is not a substitute for advice tailored to your circumstances. OBOLUS accepts no liability for action taken or not taken on the basis of this material. For advice on your situation, contact info@oboluslaw.com.