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A financial crime linked to Binance? Actions by the authorities

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The Public Prosecutor’s Office and Federal Police are looking into Binance, one of the biggest cryptocurrency exchanges in the world, for possible financial crimes, according to a story in the Brazilian publication Valor Econômico.

The inquiry was started when the Attorney General’s Office was told by the Brazilian Securities and Exchange Commission (CVM) that Binance may have disregarded a “stop order” by continuing to provide bitcoin derivatives.


Binance has problems complying with regulation

The Brazilian Securities and Exchange Commission is said to have informed the prosecutor’s office in a case involving B Fintech Serviços de Tecnologia, a business whose partner is Binance founder Changpeng Zhao, that there are signs that Binance has engaged in crimes of public prosecution.

The exchange allegedly told customers to switch the language of the website in order to access the derivatives platform Binance Futures, which could be against Brazilian legislation. According to reports, the regulatory body has offered proof of its assertions in the form of “prints” from Binance support screens.

According to the report by Filipe Batich, a partner in Madrona Fialho Advogados’ compliance department, the fact that the CVM has a “stop order” demonstrates that the person in charge of advising clients about these options for getting around CVM restrictions intended to commit the crime of irregularly exercising the activity in the labor market’s furniture value.

As a result, the broker would not answer in a criminal case, but the employee who provided the instructions would be held accountable for the claimed infringement.

To ascertain whether a crime was committed and who is accountable, the Public Prosecutor’s Office or the Federal Police will look into these details. The official who provided the order is said to be the person the police will search for. If the perpetrator is found, they might spend between six months and two years in prison.


Brazil’s Binance issues have persisted since 2020

The Brazilian Securities and Exchange Commission began administrative procedures against Binance in 2020 for providing cryptocurrency futures, which resulted in a “stop order” for the erroneous offer, the article said.

The CVM claimed that Binance’s website had a substantial amount of content in Portuguese and details on cryptocurrency futures that could be traded with up to 125 times leverage after less than 30 seconds of account setup. Additionally, there were links to films and information on company applications on the platform, and Brazilian investors were not subject to any restrictions.

In the administrative procedure, the CVM made a “stop order” for the exchange’s offer of future contracts, highlighting that under South American law, future contracts are securities regardless of their underlying assets.

The Brazilian Securities and Exchange Commission issued a “stop order” against Binance, highlighting the growing regulatory scrutiny the cryptocurrency industry is subject to and the significance of exchanges abiding by all applicable laws and regulations, not just in the US but also in nations like Brazil.