Four Binance officials, among them business CEO Changpeng Zhao (CZ), should be charged, according to a Brazilian congressional committee. The allegation, which comes in the wake of an investigation into crypto platforms suspected of running pyramid schemes, may have an impact on the global crypto company's intentions in Brazil and increase its legal difficulties.
Congressional Committee Wants to Charge the CEO of Binance and Senior Brazil Staff
If Brazilian authorities accept the suggestion of a committee at the National Congress to indict some of its officials, including founder and CEO Changpeng Zhao, Binance, the largest cryptocurrency exchange in the world by daily trading volume, may have to face another legal struggle.
According to Bloomberg, the committee, which was looking into cryptocurrency-related Ponzi schemes, has accused CZ and three senior local Binance employees of fraudulent management, offering or trading securities without authorization, and running a financial institution again without permission.
The committee, made up of 28 members of Brazil's lower house of congress, the Chamber of Deputies, also recommended that the Federal Public Prosecutor's Office look into the tax compliance of Binance's local unit and another division, Binance Capital Management.
In a statement released in response to the news, the exchange said that it has gone to "great lengths" to actively work with the committee, which claimed that Binance is "surrounded by suspicion" in Brazil in a study that accompanied its recommendations.
A further point made by Binance was that the firm "strongly rejects any attempts to make Binance 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 the world."
The Brazilian MPs also suggested that Binance be looked into for "repeated violation of the securities market rules" by the Comisso de Valores Mobiliários (CVM), the nation's securities watchdog. The exchange has been charged with continuing to sell derivatives after receiving a stop-sale order.
Aside from a CVM investigation into its local branch, which might lead to additional fines and penalties, the Brazilian regulatory agencies and central bank have not yet authorized Binance's application to buy a securities brokerage, which was made public in early 2022.
The proposal for indictment made by the parliamentary committee may result in yet another setback for Binance this year. With financial regulators in the U.S., Europe, and other countries, the crypto behemoth has been involved in legal disputes and other conflicts.
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