- Brazilian CVM accuses Binance of allegedly offering derivatives investment against a stop order.
- CVM bans Binance from offering derivatives in 2020.
- Binance claims not to offer derivatives in Brazil despite the screenshot shared by CVM.
Binance is being investigated for its role in offering derivatives investment to its users—an act long since banned by the Brazilian CVM (Securities and Exchange Commission).
On Local news outlets in Brazil, they reported on April 18 that the Federal Public Prosecutor’s Office and the Federal Police were looking into Binance’s Brazilian branch for continuing to offer derivatives to customers despite pressure from the government.
According to Econômico Valor, Binance may have allegedly committed a financial crime. The CVM and the So Paulo State Attorney General reportedly conducted the initial investigation.
As Futures contracts are considered securities under Brazilian law, the Brazilian CVM has reported Binance for breaking the law and has provided the AG concerning the stop order issued against the cryptocurrency exchange in 2020.
The Brazilian Securities and Exchange Commission released a screenshot of Binance’s website from August 2021, showing instructions in Portuguese for Brazilian customers who wanted to use the Binance Futures market.
The CVM had said in the document given to Prosecutor Marcos Angelo Grimone, “Among the points pointed out by the regulatory body are ‘prints’ of Binance support screens which the client would be advised to change the language of the site to access the Futures platform.”
Binance’s Reaction To The Accusation
In February, local media reported that Binance submitted a commitment agreement proposal in response to the Securities and Exchange Commission’s (CVM) charge. The promise, though, is being reconsidered.
In response to Valour Econmico’s claims that it had attempted to contact the cryptocurrency exchange about the incident, the exchange reiterated that it did not provide derivatives in Brazil. It stated that it would not comment on any ongoing investigations.
“Binance does not provide derivatives investment in Brazil, and it operates in compliance with the local regulatory scenario, maintaining a permanent dialogue with the officials for the development of the blockchain and crypto section in the country and the world,” Binance affirmed.
History of Binance Against Authorities
The Brazilian CVM would not be the first governmental authority to accuse the firm of going against the law.
In March 2022, Binance announced that it would cease its operations in Ontario, Canada, after it had been caught operating in the country without registering with the Ontario Securities Commission.
In the undertaking signed by Binance, the crypto firm acknowledged that it lied to Ontario residents about being permitted to operate in Ontario despite withdrawing its services in 2021.
In the document, the exchange stated that it would no longer open new accounts for Ontario residents, and it would prevent all trading on its platform.
Conclusion
Binance is on the hot seat as the Public Ministry, and Federal Police have reasons to believe that the crypto firm has committed a financial crime.
