Binance reportedly faces a probe in Brazil for allegedly allowing its users in the country to dodge a law that prevents them from investing in cryptocurrency derivatives. The company is currently under the scanner of Brazil’s Federal Prosecutor’s Office and the Federal Police, a local newspaper has reported. While the company refuted the allegations, the latest investigation will add to Binance’s legal issues in international markets. Founded in 2017, Binance has emerged as one of the largest crypto companies in the world.
Brazil enforced a stop order on citizens investing in crypto derivatives in 2020 aimed at protecting them from financial losses. Crypto derivatives allow investors bet on the projected price changes of cryptocurrencies without having to own the underlying asset.
Binance is now being investigated for letting users continue to invest in crypto derivatives, violating orders from the Brazilian Securities and Exchange Commission (SEC), according to a report (via Coin Telegraph) in Brazilian newspaper Valor Econômico.
The Brazilian SEC has shown the probing official evidence of Binance instructing its users there to change their language settings to access its Binance Futures services, that offers crypto derivative investments, as per the report.
Refuting the charges being levied against its operations in the Latin American nation, Binance has said that is ensures compliance with the laws of every nation it operates in.
“Binance reiterates that it does not offer derivatives in Brazil, that it operates in compliance with the local regulatory scenario and maintains a permanent dialogue with the authorities for the development of the crypto and blockchain segment in Brazil and in the world,” the company told Valor Econômico in a statement.
This is not the first time that the crypto exchange has faced an investigation into its business practices. In March, the US Commodity Futures Trading Commission sued Binance over alleged trading violations. Binance aims to become the most licenced crypto exchange in the world, is rapidly expanding international markets. It has already secured relevant licences in France, Bahrain, Abu Dhabi, and Dubai among other nations.
Last year in May, Binance had begun hiring more people on its legal teams in Israel, Canada, UK, Portugal, Spain, Italy, Hong Kong, Singapore, and other regions of Europe, Middle East, Africa, Latin America, and the Asia-Pacific region.