Brazilian Authorities Probe Binance for Evading a Stop Order
- Reports claim that Binance helped Brazilian users bypass the SEC’s order.
- Binance has faced multiple charges accusing it of violating trade laws.
- The crypto exchange is suspected of having close ties with China.
According to a local report, crypto exchange Binance is being probed by the Federal Prosecutor’s Office and Federal Police in Brazil for allegedly assisting clients in avoiding a stop order on investments in crypto derivatives. The news comes amid Binance’s declining relationship with regulators in the US.
The report claims that the Brazilian Securities and Exchange Commission (SEC) imposed a stop order on derivatives offerings in 2020. However, the SEC informed the Attorney General of the State of São Paulo that Binance failed to heed its order and continued to provide such services to its clients. Brazilian laws classify futures contracts as securities.
The SEC claims Binance took steps to show its users how to bypass the order. The regulator provided screenshots from August 2021 that showed instructions for Brazilian users on how to switch their language settings in order to access the Binance Futures services. The SEC also claimed that there was a substantial amount of content in Portuguese without any warnings about Brazilian users being restricted.
Binance has reportedly denied any wrongdoing, claiming that “it does not offer derivatives in Brazil, that it operates in compliance with the local regulatory scenario, and maintains a permanent dialogue with the authorities for the development of the crypto and blockchain segments in Brazil and in the world.”
This will not be the first time Binance has faced an accusation of this nature. Binance reportedly continued to operate in the Canadian province of Ontario months after it informed the Ontario Securities Commission that it would stop doing so. The crypto exchange has also faced multiple accusations in the US, including claims that it has strong ties with China and has also provided illegal services to US customers.