Following the committee’s recommendations, the decision to indict Zhao and the other company executives now lies with the Brazilian police.
The committee alleged that Zhao and the other executives have engaged in fraudulent management, offering or trading of securities without previous authorization, and operation of a financial institution without authorization.
The same congressional committee asked for Brazil’s securities regulator, Comissão de Valores Mobiliários (CVM), to investigate Binance’s continued derivatives sales following an earlier stop order. Related investigations began in April.
Bloomberg noted that the CVM rejected a 2 million reais ($396,000) settlement that Binance proposed in August. It said Binance now faces further fines and penalties.
Binance responds to allegations
Binance responded to the report by stating that it has made extensive efforts to work with the Brazilian congressional committee. The company said:
“[Binance] strongly rejects any attempts to make [it] a target or even expose its users and employees with allegations of bad practices without any proof, amid competitive disputes given the company’s leadership position in Brazil and in the world.”
Binance and its executives also face scrutiny from authorities outside of Brazil. In June, the U.S. Securities and Exchange Commission (SEC) filed charges against Binance, Binance.US, Changpeng Zhao, and related parties over alleged violations of securities law. The Commodity Futures Trading Commission (CFTC) has additionally charged Binance, while the Department of Justice (DOJ) is reportedly weighing charges as well.
Binance has also been under investigation by French authorities for more than a year, according to reports that emerged in June 2023.
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