By
Steve Muchoki
May 13th, 2024
This month, the crypto company faced issues with regulators in at least four countries.This month, the crypto company faced issues with regulators in at least four countries.
The Director of Binance in Brazil Guilherme Haddad could be called to appear before the Brazilian Parliament. This is because there is an ongoing investigation regarding the crypto company operating a pyramid scheme in the country. Congressman Alfredo Gaspar made the summons, and the vote on this issue will be held on Tuesday, June 27th.
One of the major issues this time is that some entities like Briascompany, which runs pyramid schemes and carries out activities that are against the interests of the Brazilian people, are using the crypto exchange platform to facilitate their activities.
Alfredo Gaspar mentioned in a statement translated into English:
“Therefore, we can deduce that Binance is entirely intertwined with the motivation of this CPI, and it is essential to understand its performance in the country, its relationship with B Fintech (its official representative), as well as its connection with companies that respond in court for harming Brazilian consumers.”
This is not the first time a similar issue has arisen between Binance and the Brazilian authorities. In 2020, the Brazilian Securities and Exchange Commission (CVM) already ordered Binance to stop offering derivatives trading services in the country, saying that the crypto company could not act as a securities intermediary. An order that Binance responded to in 2021.
Portal do Bitcoin, a Brazilian news website, however, reported in 2022 that Binance did not stop its futures services against the CVM’s order. The company removed the service in Brazilian Portuguese, but the service still allowed Brazilian users to change their language and invest freely. Moreover, the company’s support also guides Brazilian users on how to use the service.
Brazilian Parliament Summoned Binance Amidst Regulatory Pressures In Various Countries
Authorities in the South American country are also seeing a need to be strict on the activities of Binance in the state seeing the regulatory issues it is having in other regions.
This month, the crypto company faced issues with regulators in at least four countries. France started an investigation into Binance for various offenses, including what was regarded as aggravated money laundering. Different documents and materials are being thoroughly studied to determine the next line of action. The crypto exchange was unable to secure a virtual asset service provider in Holland, so it made plans to quit the business in the country. For some days now, the exchange users in the country have been withdrawing their funds.
Regulators in the United States also sued Binance for allegedly operating an illegal business there. It was also said that the company was misappropriating customers’ funds worth billions of dollars. The crypto exchange’s registration with the United Kingdom Financial Conduct Authority was also canceled, which means Binance would not be able to conduct regulated activities and products in the region. However, some reports said it was done at the company’s request.
Apart from the issues with regulators and the government, Binance has a pending case with Capitual, a former Brazilian Payment Processor. In 2022, Capitual could not withdraw money from Binance for up to 20 days, which the payment processor considered against Central Bank policies. About $94 million was frozen as a result. The issue is still in court as the court is yet to approve Binance’s request to unfreeze the account.