Brazil has banned funds from buying cryptocurrencies, citing what it said was the as-yet indefinitive global debate over the legal nature of this form of exchange.

Brazil’s market regulator, the CVM, said cryptocurrencies could not be considered financial assets, thereby placing them out of reach of domestic funds according to local laws.

“The interpretation of this technical division is that cryptocurrencies cannot be qualified financial assets … and for this reason this their direct acquisition by investment funds … is not permitted,” the CVM said in a circular.

It said, however, that funds wishing for indirect exposure to cryptocurrencies through foreign funds should await a further ruling from the CVM.

The move comes as regulators are debating how to deal with cryptocurrencies, with South Korea planning to ban trading in them.

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