Recently, the popular Bitcoin and altcoin exchange Binance may have been in trouble in Brazil. The Brazilian Securities and Exchange Commission (CVM) is investigating Binance, a Bitcoin and altcoin exchange, on suspicion of engaging in illegal activities by offering crypto derivatives to customers. Here are the details…
Bitcoin exchange did not fully comply with the law
Despite the government’s order to cease the company’s operations in 2020, recent findings suggest that Binance may not have fully complied. According to a report in Valor Econômico, customers in Brazil can change the language of Binance’s website to access features that would normally be restricted, including futures. Reports have reported that screenshots of this have surfaced. This workaround was accepted by a Binance support representative who recommended that customers change the language to access the platform’s futures feature. This type of advice is illegal in Brazil.
As we reported on Kriptokoin.com, Binance had already suspended futures trading in 2021, and CVM was satisfied with the company’s compliance. However, the regulator’s recent investigation revealed that Binance may not have fully complied with the cease and desist order. The regulator claims that Binance may have provided Brazilian customers with derivatives that are illegal in the country. Binance denies these claims, stating that it does not offer derivatives in Brazil.
Employees, not Binance, can be held responsible
Binance may not be held liable for the alleged illegal activities of its employees. Legal experts suggest that instead of blaming Binance, the authorities could hold the customer service representative accountable for providing a temporary solution. If found guilty, the support staff member could face prison terms ranging from six months to two years. Binance did not comment on the ongoing investigations.
Binance receives accusations from the USA and Brazil
The accusations CVM leveled against Binance in Brazil are similar to those in the US. The Commodity Futures Trading Commission (CFTC) in the US has accused Binance of helping customers bypass geo-restrictions using VPNs. In both cases, Binance is accused of violating legal requirements and engaging in illegal activities in the countries in which it operates.
Binance is a well-known cryptocurrency exchange that has faced regulatory scrutiny in various countries. Claims against Binance in Brazil and the US reveal the difficulties crypto companies face when dealing with complex regulatory requirements. While Binance has stated that it does not offer derivatives in Brazil, the regulator’s latest findings suggest otherwise. In order for Binance to continue operating in Brazil, it may be required to cooperate fully with Brazilian authorities and ensure that its employees comply with all regulatory requirements. Time will tell if the allegations are true and whether the exchange will take action against it.
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