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Binance braces as Brazil urges crypto scam indictments

source-logo  blockworks.co 11 October 2023 07:30, UTC

A Brazilian congressional committee is recommending the indictment of three Binance executives.

The executives include Binance CEO Changpeng Zhao, Binance’s Brazil general director Guilherme Haddad Nazar, and Latin America institutional relations director Daniel Mangabeira.

It’s important to note, though, that while the committee can make suggestions on indictments, it’s up to the Brazilian police to move forward. Bloomberg News first reported on the committee’s recommendation.

If the police do decide to move forward, the executives could face charges related to fraudulent management, operating a financial institution without authorization and a “crime against the national financial system,” per a translated article from Portal do Bitcoin.

A 508-page report focused on pyramid schemes. According to a translated version of the report, its goal is to ”investigate indicators of sophisticated fraudulent operations in the management” of companies involved with crypto.

“Binance has remained committed and collaborative with the commission seeking constructive debate on the industry’s challenges in the interest of users and benefit of society overall. We strongly reject the exposure of our users or employees with baseless accusations of bad practices and the attempts to make Binance a target,” Binance said in an emailed statement to Blockworks.

“As a responsible industry leader, Binance remains committed to helping the industry grow sustainably and furthering its security, which includes close collaboration with law enforcement around the world and in Brazil to detect suspicious activities and fight cybercrimes and illicit activities. Binance has an industry-leading global compliance program and investigations team with hundreds of employees across the globe and continues actively collaborating with authorities worldwide to thwart bad actors and keep the ecosystem more secure.”

The probe proposed the indictments of roughly 45 people.

According to Valor Economico, requests have been made to Brazil’s Federal Police, Federal Revenue and Federal Public Ministry to pursue investigations into companies such as Binance.

The company, which is the largest cryptocurrency exchange in the world, has faced numerous challenges as regulators crack down on crypto.

Most recently, it formed a partnership with Rebuildingsociety.com to ensure compliance with the United Kingdom’s new regulations from the Financial Conduct Authority on crypto marketing. However, on Tuesday, the FCA issued a restriction on Rebuilding Society, preventing it from approving crypto marketing.

Binance also exited Russia after it announced a sale deal with CommEX. The company was, however, able to reopen business in Belgium after a regulatory issue.