Binance and its executives continue to face regulatory scrutiny globally. This time, a Brazilian congressional committee has recommended the indictment of Changpeng Zhao (CZ), the co-founder and CEO of the global cryptocurrency exchange.
Brazilian Legislators Target Binance Executives
Bloomberg reported that in addition to CZ, the committee has recommended the indictment of three other senior executives at the exchange.
As stated in the report, the recommendation comes after the committee accused the executives of fraudulent management, offering unregistered securities, and operating a financial institution without permission.
In a report following the latest recommendation, lawmaker Ricardo Silva said Binance is “surrounded by suspicion.”
On top of the recommendation, the legislators have also asked the Federal Public Prosecutor’s Office to scrutinize the tax compliance of Binance’s local unit known as Binance Capital Management.
According to the report, Brazilian police will now have to decide whether to proceed with actual indictments following the latest recommendation.
Securities Market Rule Violation
Additionally, the legislators suggested that Brazil’s securities regulator, Comissão de Valores Mobiliários (CVM), investigate Binance’s sale of derivatives. According to the committee, such offerings by the exchange constituted a “repeated violation of the securities market rules.”
Earlier in August, the securities regulator rejected a 2 million reais ($396,235) settlement related to Binance’s sale of derivatives in Brazil.
In response to the latest report, Binance stated that it has made a significant effort to work with the committee but “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 in the world.”
Binance is also facing regulatory scrutiny related to its proposed acquisition of Brazilian securities brokerage Sim;paul Investimentos, which it announced last year.
Aside from Brazil, the crypto exchange has recently faced heightened regulatory pressure in multiple countries. For instance, the company and its CEO are in a legal tussle with the United States Securities and Exchange Commission (SEC) over allegations of unregistered securities sales.
