Binance CEO, colleagues face potential indictment in Brazil

A Brazilian congressional committee has suggested indicting Binance CEO Changpeng Zhao and other leaders at the exchange, alleging fraud.

Brazil’s National Congress committee’s recommendation to indict Binance’s leaders, including Zhao, could lead to a legal battle for the world’s largest cryptocurrency exchange.

The committee investigating crypto-related Ponzi schemes accused Zhao and three local Binance employees of fraudulent management and unauthorized trading of securities and financial operations.

According to reports, the committee — consisting of 28 members from the Chamber of Deputies, the lower house of parliament — recommended that Brazil’s Federal Public Prosecutor’s Office also investigate Binance’s local unit and a separate entity, Binance Capital Management, for tax compliance.

Binance stated that it is cooperating with the committee.

Binance’s Brazil trouble

This isn’t Binance’s first encounter with regulatory scrutiny in Brazil. The firm’s Brazilian unit is under investigation by the country’s securities regulator, Comissão de Valores Mobiliários (CVM), concerning the sale of derivatives.

However, Binance has denied these allegations without evidence, asserting its innocence amid competitive tensions in Brazil and the global market.

Brazilian lawmakers are now urging the CVM to investigate Binance for repeated violations of securities market rules, specifically related to ongoing derivative sales despite previous orders to halt.

Moreover, Binance’s bid to acquire a Brazilian securities brokerage, announced in early 2022, is pending approval from regulatory bodies and the central bank.

The committee’s recommendation for indictment poses another significant challenge for Binance this year, adding to its legal woes as it navigates conflicts with financial regulators in the United States, Europe, and various other regions.

Binance has responded to the Brazilian situation by affirming its commitment to obeying local laws and cooperating with Brazilian authorities. <

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Author: Ogwu Osaemezu Emmanuel

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