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Binance Faces Legal Storm in Brazil: CEO and Executives Accused

source-logo  coinpedia.org 11 October 2023 02:25, UTC

In a dynamic crypto landscape, Brazil finds itself at a crossroads. On the one hand, its neighbor and bilateral partner Argentina boasts a Presidential candidate openly supporting Bitcoin. Conversely, Brazil’s Congressional committee is proposing indictments against three critical executives of Binance, one of the world’s largest cryptocurrency exchanges. These indictments revolve around allegations of fraudulent management, unauthorized securities trading, and running an unlicensed financial institution.

Binance’s Response:

In response to these allegations, Binance stated to Bloomberg, expressing its willingness to cooperate with the committee. However, the exchange vehemently rejects any attempts to tarnish its reputation without concrete evidence. Binance argues that these allegations are driven by competitive disputes, given its dominant position in Brazil and worldwide.

Indictment Proposals, not Charges:

It’s important to note that the Congressional committee can only propose indictments; the decision to proceed with charges rests with the Brazilian police. The committee, comprised of 28 lower house members, has also called for an investigation into tax evasion by Binance Capital Management and the local branch of the exchange.

Legislators’ Perspectives:

In the committee’s report, Lawmaker Ricardo Silva expressed suspicion surrounding Binance’s operations in Brazil. The committee further recommended that Brazil’s securities watchdog, CVM, investigate Binance’s derivatives sales despite receiving a stop order. This ongoing activity was deemed a repeated violation of securities market rules.

What’s Next?

Brazil is formulating regulations requiring local licensing for foreign exchanges, mirroring European crypto regulatory frameworks. Binance asserts that neither its global nor regional offices are specific to Brazil. This development in Brazil aligns with a global trend as regulators in various countries, including Australia, France, and the United States, scrutinize the world’s largest cryptocurrency exchange operations.

In this rapidly evolving landscape, the outcome of these allegations and regulatory developments will undoubtedly impact the future of cryptocurrencies in Brazil and beyond.