Binance, the world’s largest cryptocurrency exchange, is currently under investigation in Brazil for its suspected involvement in pyramid schemes. This development adds to the growing international regulatory scrutiny faced by Binance, as authorities in the United States, Australia, and the Netherlands have already raised concerns about the company’s operations. In response, Binance.US and its legal team have challenged the Securities and Exchange Commission (SEC) over what they deem to be misleading statements in a lawsuit. Furthermore, Binance is being investigated in Brazil for allegedly assisting customers in circumventing restrictions on crypto derivatives investments. As the pressure on Binance intensifies, Brazilian Deputy Alfredo Gaspar has called for the head of Binance Brazil, Guilherme Haddad, to appear before the Brazilian Chamber of Deputies as part of an ongoing investigation into potential pyramid schemes in the country.
On June 21, Brazilian Deputy Alfredo Gaspar urged Guilherme Haddad, the head of Binance Brazil, to testify before the Brazilian Chamber of Deputies as part of an inquiry into suspected pyramid schemes. The Parliamentary Commission of Inquiry (CPI) is set to vote on Gaspar’s request on June 27. The investigation aims to shed light on Binance’s operations, its relationship with B Fintech (its official representative), and any potential connections to companies involved in legal disputes that have harmed Brazilian consumers.
Brazil’s call for an investigation into Binance comes at a time when the cryptocurrency exchange is already facing regulatory challenges from multiple countries. Regulators in the United States, Australia, the Netherlands, and now Brazil have turned their attention to Binance’s activities. According to Gaspar, Binance allegedly facilitated the transfer of assets related to a suspected pyramid scheme on March 11, 2023, when the São Paulo Justice system froze R$ 500 thousand reais in Binance. Brazilian regulatory authorities argue that Binance’s lack of compliance with regulations in various countries has fueled intensified scrutiny.
In addition to pyramid scheme allegations, Binance is also under investigation in Brazil for potentially assisting customers in bypassing restrictions on cryptocurrency derivatives investments. The Federal Prosecutor’s Office and Federal Police are examining the company’s operations to determine if it played a role in enabling investors to evade these restrictions.
Did you know that Binance, founded by Changpeng Zhao (also known as “CZ”) in 2017, initially began as an exchange in China but later relocated its headquarters to Malta? Binance’s decision to establish its base in Malta was driven by the country’s favorable regulatory environment and the government’s efforts to embrace blockchain technology. This move helped Binance become one of the largest cryptocurrency exchanges globally, offering a wide range of digital assets for trading.
As Binance faces increased scrutiny from regulators around the world, its Brazilian operations are now under investigation for suspected pyramid schemes and potential involvement in circumventing cryptocurrency derivatives investment restrictions. The outcome of the Brazilian Parliamentary Commission of Inquiry’s vote on whether to summon Guilherme Haddad, the head of Binance Brazil, will shed further light on the ongoing investigation. Meanwhile, Binance continues to defend itself against regulatory actions in multiple jurisdictions, emphasizing the need for transparency and compliance in the cryptocurrency industry.
Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
