Legal woes mount for Binance as Brazilian committee recommends indictment.
Brazil's legislative body has urged law enforcement to bring charges against Binance CEO Changpeng "CZ" Zhao and three of his fellow executives.
This recommendation comes in the wake of an extensive probe into pyramid schemes and fraudulent financial activities within the country.
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Deputy Ricardo Silva, who led the congressional committee, published a 500-page report on October 10th.
The report levels severe accusations against Zhao, Daniel Mangabeira, Guilherme Haddad Nazar, and Thiago Carvalho. Specifically, the executives are accused of fraudulent management, operating without proper authorization, and offering securities trading without the necessary regulatory approval.
The document alleges that the accused have established an intricate network of legal entities to evade legal compliance.
Beyond Binance executives, 45 other individuals have also been recommended for indictment. These individuals are affiliated with various other crypto companies and are suspected of being part of criminal schemes.
Ricardo Silva also noted that Binance's operations in Brazil have been fraught with regulatory issues. Accordingly, the committee advises that the Federal Public Ministry focus its investigation on potential tax evasion, money laundering, and the financing of organized crime and terrorism related to Binance's operations.
Moreover, Brazil's Securities and Exchange Commission is advised to investigate Binance for its continued sale of derivative products despite being warned to cease such activities. It should be noted that the committee's recommendations are not legally binding but serve as suggestions for further action by local authorities.
In response to the recommendations, Binance said it remains committed to cooperating with Brazilian authorities. While welcoming constructive dialogue about regulatory challenges in the cryptocurrency industry, Binance also vehemently denies any unfounded accusations against its operations or staff.
These recommendations in Brazil add to Binance's mounting regulatory challenges worldwide. The company is also facing legal actions in the United States and Australia relating to alleged violations of financial regulations.
Given the gravity of these allegations and the ongoing regulatory scrutiny in other countries, the situation for Binance in Brazil is far from resolved. It will likely have broader implications for the cryptocurrency industry.
