...By Henry George for TDPel Media.
Brazilian authorities are reportedly investigating Binance, one of the world’s largest cryptocurrency companies, for allegedly allowing its users in the country to invest in cryptocurrency derivatives, which violates local laws.
A stop order was imposed in Brazil last year that prohibits citizens from investing in crypto derivatives, as it puts them at risk of financial losses.
However, the country’s Federal Prosecutor’s Office and Federal Police are now scrutinizing Binance for potentially flouting the law.
While the company has denied the allegations, this latest investigation will contribute to Binance’s existing legal challenges in international markets.
The Alleged Violation of Brazilian Law
According to the Brazilian Securities and Exchange Commission (SEC), Binance instructed its Brazilian users to change their language settings to access its Binance Futures services, which offers crypto derivative investments.
The Brazilian SEC has provided evidence of this to the investigating officials.
As a result, Binance is now being investigated for allegedly violating orders from the SEC that prohibit investing in crypto derivatives.
Binance Denies Any Wrongdoing
In response to the charges against its operations in Brazil, Binance has stated that it always complies with the laws of every country it operates in.
The company maintains that it does not offer derivatives in Brazil, adding that it works in compliance with the local regulatory environment and engages in a permanent dialogue with authorities to advance the crypto and blockchain sector in Brazil and worldwide.
Binance’s Legal Issues and Expansion Plans
This is not the first time that Binance has faced legal issues over its business practices.
Earlier this year, the US Commodity Futures Trading Commission sued the company over alleged trading violations.
Nevertheless, Binance is rapidly expanding its international markets and aims to become the world’s most licensed cryptocurrency exchange.
It has already secured licenses in countries such as France, Bahrain, Abu Dhabi, and Dubai.
Binance’s legal challenges in Brazil add to the list of regulatory hurdles the company has faced in recent years.
The investigation highlights the need for cryptocurrency companies to comply with the laws and regulations of the countries in which they operate.
With its plans for global expansion, Binance will need to remain vigilant in ensuring that it adheres to all applicable regulations, as any missteps could result in serious legal consequences.