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Brazil: Binance CEO accused - The Cryptonomist

source-logo  en.cryptonomist.ch 11 October 2023 06:44, UTC

Binance CEO Changpeng CZ Zhao and three other local crypto-exchange executives could be indicted in Brazil at the suggestion of Brazil’s congressional committee. The charge is fraud and other financial crimes, such as selling unauthorized securities.


Brazil: Congress could indict CEO and other local Binance executives for financial crimes

A committee of Brazil’s Congress has put the CEO and three other local executives of Binance in its crosshairs on charges of fraud and other financial crimes.

According to the final report, the committee accuses Changpeng Zhao (or CZ), along with Daniel Mangabeira, Guilherme Haddad Nazar, and Thiago Carvalho, of several crimes. Among the many are charges of fraudulent management, operating without the proper authorizations, and, most importantly, offering security trading without approval.

The committee, led by Congressman Ricardo Silva, said the four defendants allegedly:

“set up an opaque network of legal entities, all controlled directly or indirectly by Zhao, without defined business purpose and with no other purpose than evading compliance with the law.”

In practice, Binance finds a new jurisdiction on his heels for his actions. Not coincidentally, Silva himself would point out that suspicions about Binance’s activities have arisen precisely because of its apparently non-compliant position in many other jurisdictions.

At the moment, the congressional committee’s allegations are not binding, but only suggestions to investigate. For this very reason, Binance has not wanted to stop its activities.

Brazil and the charges against the CEO and executives of Binance: what does the commission suggest should be done?

Going more specific, the congressional committee in Brazil appears to be recommending that local law enforcement agencies and the Federal Public Ministry launch an investigation into all of Binance’s operations in Brazil.

Its purpose is to dig for possibly finding operations of tax evasion, money laundering, and financing of organized crime and terrorism.

For this very reason, the committee also reportedly suggested indicting 45 other people for alleged participation in criminal schemes, with the nominees linked to multiple cryptocurrency companies.

Regarding Binance’s offering of “security” trading, the commission has brought in the Brazil Securities and Exchange Commission, or CVM, to look into possible violations.

The situation of crypto-exchange and CZ in the US

As is well known, it has been since June 2023 that Binance has been in the crosshairs of the U.S. Securities and Exchange Commission (or SEC), with as many as 13 charges, with the most notorious related to the sale of unauthorized security.

After a whole summer of investigation, with requests and denials, it seems that September has arrived with good news for the crypto-exchange.

And in fact, the federal judge has denied permission for the SEC to inspect the software of the crypto-exchange Binance.US, requested by the government agency because of its suspicions after it failed to cooperate with its investigation.

Not only that, also in September, the CEO of Binance, CZ, took the field to file a motion to dismiss the lawsuit filed by the SEC against them. The reason is that the SEC would have exceeded its powers in dealing with the lawsuit, and then also because there is still no regulatory clarity in the US in the crypto field.