Binance is reportedly under investigation by federal prosecutors and police in Brazil.
The crypto exchange allegedly helped its clients evade a stop order on crypto futures trading.
Futures are deemed securities in Brazil irrespective of the nature of the underlying assets.
The investigation was initiated after Brazil’s top financial regulator reported suspicious activities at Binance.
The world’s largest crypto exchange has once again run into trouble with the law, this time in the South American nation of Brazil. Binance is reportedly being investigated in Brazil by the Federal Public Prosecutor’s Office and the Federal Police of Brazil for allegedly offering securities to its clients by helping them evade a stop order on crypto futures.
Binance Allegedly Offered Derivatives Despite A Stop Order
According to a recent report by Brazil’s Valor Econômico, the public prosecutor’s office and the federal police are investigating Binance for alleged financial crimes related to the products being offered. The investigation was initiated after Brazil’s Comissão de Valores Mobiliários (Securities and Exchange Commission) informed the Attorney General of the State of São Paulo that the crypto exchange may have continued to offer crypto derivatives to Brazilian clients despite a stop order that was issued in 2020.
The Brazilian regulator reportedly provided screenshots to the federal police which showed Binance’s support personnel guiding its customers to change the website’s language in order to be able to access the futures trading platform. Futures are deemed securities in Brazil irrespective of the nature of the underlying assets.
(Binance) reiterates that it does not offer derivatives in Brazil, that it operates in compliance with the local regulatory scenario and maintains a permanent dialogue with the authorities for the development of the crypto and blockchain segment in Brazil and in the world.”
Binance’s statement to Valor Econômico
In 2020, the Brazilian Securities and Exchange Commission initiated administrative proceedings against Binance over the crypto derivatives offered on its trading platform. According to the regulator, the crypto exchange’s website had extensive content in Portuguese, which marketed crypto futures that could be traded with up to 125 times leverage after opening an account “in less than 30 seconds”. The website reportedly had no mention of the restrictions on such offerings for clients resigning in Brazil.