Federal prosecutors and police in Brazil have started investigating
Binance, the largest crypto exchange by trading volume, over
allegations that the platform helps clients continue using its crypto
derivatives services despite a stop order.
The action was reported by the Brazilian Securities and Exchange Commission to the Attorney General of Sao Paulo.
- In 2020, the commission issued a stop order on the exchange’s crypto derivatives offerings since Brazilian law classifies future contracts as securities regardless of the nature of the underlying assets.
- The agency claimed that Binance continued to offer crypto derivatives to Brazilian clients after the stop order.
- Brazil’s
Securities and Exchange Commission also provided a screenshot from
August 2021 showing that the exchange directed the users in Brazil to
change their language settings to access the Binance Futures section.
- Binance
responded to the claims by reiterating that it does not offer
derivatives in Brazil, complies with local regulations, and maintains a
permanent dialogue with Brazilian authorities.
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- Binance is similarly under scrutiny in the U.S. by the Commodity Futures Trading Commission (CFTC), the Internal Revenue Service (IRS), the Securities and Exchange Commission (SEC), and federal prosecutors.
- Earlier in April, the platform similarly had to permanently halt
the operations of its derivatives services in Australia following the
cancellation of the financial services license of its derivatives
business by the Australian Securities and Investments Commission
(ASIC).
- The firm’s employees were also recently alleged of helping customers in China bypass the platform’s security protocols.
