Brazil investigates Binance’s cease-defiance

According to a report in Valor Econômico, the Brazilian Federal Prosecutor’s Office and Federal Police are investigating Binance. Allegedly, the cryptocurrency exchange assisted customers in evading a halt order on cryptocurrency derivatives investments.

The newspaper reports that the Brazilian Securities and Exchange Commission (SEC) reported to the Attorney General of the State of Sao Paulo that Binance may have continued to offer cryptocurrency derivatives to its customers after the SEC issued a halt order in 2020.

Under Brazilian law, futures contracts are deemed securities regardless of the nature of the underlying assets.

Screenshots from August 2021 depicting instructions for Brazilian users to alter their language settings to access the Binance Futures section were provided to law enforcement by the SEC.

The SEC also reported that Portuguese-language content was abundant without any restrictions for Brazilian consumers.

According to publicly available information obtained by Valor Econômico, Binance responded to the allegations in February by submitting a proposal for a commitment agreement. No decision has yet been taken regarding this proposal.

Binance told the newspaper in a statement that it “reiterates that it does not offer derivatives in Brazil, that it operates in compliance with the local regulatory scenario, and that it maintains a permanent dialogue with the authorities for the development of the crypto and blockchain segments in Brazil and around the world.”

Binance has previously confronted comparable allegations. It continued to conduct business in the Canadian province of Ontario for months after informing the Ontario Securities Commission that it would cease operations.

According to a February report, Binance acknowledged that it was working with United States regulators to resolve compliance issues. The U.S. Commodity Futures Trading Commission sued Binance in March for purported trading violations.