The Brazilian authorities are investigating a subsidiary of the world’s largest crypto exchange, Binance Brazil. A Brazilian Chamber of Deputies member, Congressman Alfredo Gaspar, called to summon Binance Brazil’s director Guilherme Haddad.
The exchange executive is expected to face the Brazilian Parliament on June 21 as part of the probe by the Parliamentary Commission of Inquiry (CPI).
Binance is being investigated over the allegation of pyramid schemes in the country. And the Congress would vote on summoning the Binance executive Haddad by next Tuesday, June 27.
Binance Faces Investigation In Brazil
The Brazilian news media Portal do Bitcoin revealed that Haddad would face the Brazilian Chamber of Deputies, the country’s lower house of Congress, once the vote is approved.
Related Reading: Former Barclays CEO Urges The Crypto Industry To Embrace Regulations
The investigation into the crypto exchange is coming amid the recent regulatory crackdown on the exchange by different global jurisdictions. Notably, authorities in the United States, Holland, the United Kingdom, and France have placed Binance under their regulatory spotlight.
Deputy Gaspar alleged that the crypto firm had used pyramid schemes for asset transfers in Brazil. Additionally, Brazilian authorities reported that the investigation on the crypto exchange is because regulators from other countries are also probing the exchange on the same issues.
Gaspar stated the importance of understanding different aspects of Binance operations, including the exchange’s association with B Fintech and involvement with several entities that are on the legal radar for exposing Brazilian customers to insecurities.
Moreover, the Federal Prosecutor’s Office and Federal police have already been investigating the crypto exchange in Brazil.
The firm was previously accused of aiding users to avoid a stop order on crypto derivatives investments. According to a reporter at Portal do Bitcoin, Saori Honorato, Binance’s investigation for providing unauthorized derivatives market products started in 2020.
Binance’s Turbulence Sail in Brazil
In its lastest news, Portal do Bitcoin reported the interaction between the Securities and Exchange Commission of Brazil (CVM) and Binance.
The regulator demanded that the exchange should discontinue the provision of Bitcoin futures products to Brazilian consumers.
According to the report, Brazil banned the offering of derivatives in 2020. But CVM noted that Binance changed the language to English or Portuguese from Portugal on the service for derivatives products which gives users access to the service.
Also, the regulator suspected that some exchange employees are helping customers to continue using the banned services discretely. Additionally, the crypto exchange has been in a lawsuit with Capitual, its former Brazilian payment processor.
The legal battle started in 2022, resulting in the exchange not allowing fund withdrawals in Brazilian real for 20 days. On its part, Capitual claimed that Binance’s suspension of withdrawal in real is against Central Bank rules.
The case led to the freeze of 450 million BRL worth about $94 million. Though the crypto exchange petitioned to unfreeze the funds, the presiding court rejected its petition.
Featured image from Pixabay and chart from Tradingview.com
