Brazilian Congress Targets Binance CEO and Executives for Financial Crimes
A committee in Brazil’s Congress is accusing Binance CEO Changpeng Zhao and three other local executives of fraud and other financial crimes. The final report from the committee alleges that the defendants engaged in fraudulent management, operated without proper authorizations, and offered security trading without approval. The committee also claims that Binance set up an opaque network of entities controlled by Zhao to evade compliance with the law. These allegations have arisen due to suspicions about Binance’s activities in various jurisdictions. While the committee’s suggestions are not binding, it recommends investigating all of Binance’s operations in Brazil for tax evasion, money laundering, and financing of organized crime and terrorism.
Recommendations for Investigation and Indictments
The congressional committee suggests that local law enforcement agencies and the Federal Public Ministry should launch an investigation into all of Binance’s operations in Brazil. They aim to uncover possible violations such as tax evasion, money laundering, and financing of organized crime and terrorism. Additionally, the commission recommends indicting 45 other individuals associated with multiple cryptocurrency companies for alleged participation in criminal schemes. The Brazil Securities and Exchange Commission (CVM) has been called upon to investigate Binance’s offering of “security” trading.
Binance’s Troubles in the US
Binance has been under scrutiny by the U.S. Securities and Exchange Commission (SEC) since June 2023, facing 13 charges related to unauthorized security sales. However, in September, a federal judge denied the SEC permission to inspect Binance.US’s software after the exchange failed to cooperate with the investigation. Furthermore, Binance CEO CZ filed a motion to dismiss the lawsuit filed by the SEC, arguing that the agency exceeded its powers and highlighting the lack of regulatory clarity in the U.S. cryptocurrency industry.
Hot Take: Binance Faces Legal Troubles in Multiple Jurisdictions
Binance, one of the world’s largest cryptocurrency exchanges, is facing legal challenges in Brazil and the U.S. In Brazil, a congressional committee has recommended investigating Binance for financial crimes such as fraud and unauthorized security trading. The committee also suggests indicting Binance executives and other individuals associated with cryptocurrency companies for alleged criminal schemes. Meanwhile, in the U.S., Binance is battling multiple charges from the SEC related to unauthorized security sales. Despite these legal troubles, Binance continues its operations while defending itself against the allegations. The outcome of these cases will have significant implications for Binance and the wider cryptocurrency industry.
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