Brazilian Authorities Launch Investigation Into Binance for Alleged Financial Crimes

  • Brazilian authorities have launched an investigation into Binance on allegations of financial crimes facilitated through crypto derivatives.
  • The investigation was reportedly launched following a tip-off from the Brazil Securities and Exchange Commission.
  • Binance has denied offering derivatives in Brazil, and stated that it is collaborating with regulators to comply with their obligations.

Brazil Launches Investigation Into Binance

Brazilian authorities have confirmed the launch of an official investigation into world’s largest cryptocurrency exchange, Binance. The probe concerns allegations that the exchange failed to respond to a stop order, directing it to stop selling crypto derivatives.

Tip-Off From Brazil SEC

The investigation was reportedly prompted by a tip-off from the Brazil Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM). The CVM informed the Attorney General of Sao Paolo that Binance allegedly ignored a “stop order” issued by the state. As a result, it purportedly offered crypto derivatives to Brazil users in contravention of legal requirements. Consequently, both the Federal Police and Federal Prosecutor’s Office are now involved in the probe.

Binance Denies Offering Derivatives In Brazil

So far, Binance has refused to comment on any ongoing investigations. Nonetheless, it has categorically denied offering any type of derivatives in Brazil. According to documents from Comissão de Valores Mobiliários, they had issued the aforementioned stop order back in 2020 after which Binance stated that it would cease offering crypto derivatives in Brazil. However, staff members discovered they could access these offerings by altering language settings on either its app or website.

Collaborative Approach To Regulators

In response to inquiries made about its operations within various jurisdictions around the world — including those overseeing cryptospace — Binance noted its collaborative approach when dealing with regulators while also stressing its commitment to compliance obligations.

Trouble Mounting For Biance

As things stand, this is not looking good for Binance which already had a tumultuous start this year due to several other issues. Early April saw Australia’s Securities and Investment Commission (ASIC) revoke approval for its Australian branch registration as well as suspend certain services provided by another related entity for lack of proper disclosure over potential conflicts between directors‘ interests and company duties as well as misleading statements made about information collection practices implemented for anti-money laundering purposes.