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.
Binance’s legal troubles
Binance, the global cryptocurrency exchange, has been involved in various legal troubles in various countries. In the United States, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have filed complaints against Binance for alleged regulatory violations. These legal proceedings have put the exchange under scrutiny and could have significant consequences for its operations in the US.
In addition to the US, Binance has faced regulatory pressure in countries like France and Australia. The exchange has been under investigation by regulators in these countries, raising concerns about its compliance with local laws and regulations. The extent of the penalties Binance may face in these jurisdictions remains uncertain, but the company’s acknowledgment of violating the law could have far-reaching implications for its future operations.
Furthermore, Binance has encountered regulatory issues in countries like the Netherlands, Belgium, and Russia. In Belgium, the exchange was asked to cease servicing customers due to violations of local laws. Meanwhile, Binance has been evaluating the option of leaving the market amidst regulatory uncertainties in Russia. These legal troubles in multiple countries pose a significant challenge for Binance in effectively addressing and resolving regulatory concerns on a global scale.