Binance, Exec Could Testify In Brazil For Running Pyramid Scheme

Amid the ongoing legal scuffles with the US Securities and Exchange Commission, Binance faces another hurdle. Its subsidiary Binance Brazil has attracted the attention of Brazilian authorities for allegedly facilitating a pyramid scheme. 

Binance Faces Investigation In Brazil

The Brazilian news media Portal do Bitcoin reported that the regulators accuse Binance of facilitating asset transfer through the pyramid scheme. 

A member of the Brazilian Chamber of Deputies, Congressman Alfredo Gaspar, proposed that the director of Binance Brazil’s Guilherme Haddad give testimony regarding the exchange’s operations. The allegations Gaspar laid on the crypto firm regard using pyramid schemes to facilitate asset transfers in the country. 

As such, Deputy Gaspar aims to uncover the different Binance operations in Brazil, such as its association with B Fintech and other entities that the authorities have flagged as risks to Brazilian customers. 

Notably, on June 21, Guilherme Haddad will face the Brazilian Parliament to cooperate with the Parliamentary Commission of Inquiry (CPI) probe. 

Portal do Bitcoin also revealed that the Brazilian Congress would vote on Guilherme Haddad’s summons on June 27. If the Congress approves the vote, the executive will face the country’s lower house of Congress, the Brazilian Chamber of Deputies.

Binance Has Seen Turbulent Times In Its Brazilian Operations

Apart from the recent summon, the Brazilian Federal Prosecutor’s Office and Federal police have been investigating the crypto exchange. 

The authorities accused the firm of helping its customers evade the stop order on digital currency derivatives in Brazil. Notably, Saori Honorato reported that the authorities started this derivatives market products investigation in 2020. 

Also, the news outlet previously reported issues between the Brazilian Securities and Exchange Commission (CVM) and the crypto exchange, Binance.

The commission mandated Binance to stop providing Bitcoin futures products to its Brazilian consumers after it banned the offering of derivatives in 2020. But Binance didn’t heed the mandate. 

Instead, the CVM alleged that Binance changed the language of the derivatives products and continued allowing its users access to them. 

Also, there has been an ongoing lawsuit between Binance and its former Brazilian payment processor  Capitual since 2022. Binance even stopped fund withdrawals in Brazilian reais for 20 days. 

Capitual disagreed with the withdrawal suspension, saying it was against Central Bank rules leading to the freeze of 450 million BRL worth about $94 million to date. 

The recent attention on the crypto exchange is adding to the regulatory crackdown from the US SEC and attention from other global jurisdictions. 

Some authorities in other countries, such as the United Kingdom, France and Holland, also pay close attention to Binance’s operations. Meanwhile, Binance coin, BNB, is trading in the green today, anchoring on the bullish trend in Bitcoin and other coins.