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The CEO of Binance and three local executives are facing the risk of indictment in Brazil for alleged financial crimes.
A congressional committee that investigated crypto-related pyramid schemes in the country has recommended that law enforcement authorities indict Changpeng Zhao, also known as CZ, Daniel Mangabeira, Guilherme Haddad Nazar, and Thiago Carvalho, who are in charge of Binance’s operations in Brazil.
According to a 500-page report released by the committee on Oct. 10, Binance and its leaders are accused of fraudulent management, offering or trading securities without prior authorization, and operating a financial institution without consent.
The report claims Binance set up a network of legal entities controlled by Zhao to evade compliance with the laws.
The committee also suggested that the Federal Public Ministry investigate Binance’s tax compliance, money laundering, and financing of organized crime and terrorism. Moreover, the committee urged the Securities and Exchange Commission (CVM) to probe Binance’s sale of derivatives products, which the committee said was a repeated violation of market regulations.
Binance is already under scrutiny by the CVM for allegedly offering derivative products illegally in Brazil. The exchange also faces regulatory challenges in several other jurisdictions, such as France, the US, and Singapore.