Binance CEO Accused of Fraud by Brazilian Congress
- A Brazilian Congressional committee has recommended local law enforcement agencies probe Binance and its CEO.
- It claims that the exchange, CEO Zhao, and its local executives are engaged in fraudulent schemes.
- The Congressional committee has accused the firm of operating without a sufficient license in the region.
- The firm has “set up an opaque network of legal entities, all controlled directly or indirectly by Zhao,” it said.
Changpeng Zhao, the CEO of the world’s largest crypto exchange by trading volume, Binance, is now a target of a Brazilian congressional committee that has recommended law enforcement actions against the executive and seeks to indict the billionaire entrepreneur over alleged fraudulent financial pyramid schemes in the South American country.
A 500-page report was published by the Brazilian committee on October 10, in which the Binance CEO, along with local executives Daniel Mangabeira, Guilherme Haddad Nazar, and Thiago Carvalho, were accused of fraudulent management practices, operating without sufficient authorization, and offering securities trading without authorization.
The committee led by deputy Ricardo Silva claimed that Binance, Zhao, and others “set up an opaque network of legal entities, all controlled directly or indirectly by Zhao, without defined business purposes and with no other purpose than evading compliance with the law.” The committee also suggested the indictment of 45 other people, citing “strong evidence” of their alleged participation in criminal schemes.
Silva noted that Binance’s operations in several jurisdictions are being investigated, and in Brazil, the authorities believe that the exchange is “surrounded by suspicion.” The Congressional committee asked the Federal Public Ministry to launch an investigation into the crypto exchange and its executives. The focus of the investigation would be on tax evasion, money laundering, and the financing of organized crime and terrorism.
The committee also targeted the crypto exchange’s sale of derivatives products, asking the Brazilian Securities and Exchange Commission (CVM) to launch an investigation into these products. It believes that despite being told to cease offering derivatives to the country’s citizens, Binance continued to offer them, which constituted a “repeated violation” of market regulations.
It is important to note that the 500-page documents from the committee are not binding on the local law enforcement authorities but are mere suggestions. Regional regulators will decide if they will launch an investigation or refrain from doing so.
As reported earlier by Bitnation, Binance confirmed that it was helping Israel’s police freeze some crypto accounts linked to the Hamas group. The authorities have seized 190 Hamas-linked accounts on the leading exchange since 2021.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
