Report: Brazilian Regulators Investigate Binance for Guiding Clients to Bypass Stop Orders

    According to reports, the Brazilian SEC provided screenshots from Binance's Brazilian website to demonstrate instructions on bypassing a stop placed on futures trading on the platform.

    As per a report by Valor Econômico newspaper, Binance is currently being investigated by the Federal Prosecutor’s Office and Federal Police in Brazil for allegedly assisting clients in evading a stop order on cryptocurrency derivatives investments.

    The Brazilian Securities and Exchange Commission (SEC) notified the Attorney General of the State of São Paulo that Binance may have continued to offer cryptocurrency derivatives to its clients even after the SEC had issued a stop order on those offerings in 2020. As per Brazilian law, futures contracts are classified as securities, irrespective of the underlying assets.

    Screenshots taken in August 2021 were presented by the SEC to the police, which demonstrated instructions provided to Brazilian users to change their language settings to access the Binance Futures section. Moreover, the SEC also highlighted the presence of extensive Portuguese-language content with no indications of restrictions on Brazilian users.

    Valor Econômico has reported that Binance submitted a proposal for a commitment agreement in response to the charges in February, as per the public information available. However, there is no update yet on the decision regarding the proposal.

    Binance told the newspaper in a statement that it “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.”

    Binance has encountered similar accusations in the past. It continued its operations in the Canadian province of Ontario for several months, despite informing the Ontario Securities Commission that it would terminate its activities. In February, Binance purportedly admitted to resolving compliance concerns with United States regulators. However, in March, Binance was sued by the U.S. Commodity Futures Trading Commission for alleged trading breaches.

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