In a 500+ page report, a Brazilian congressional committee has laid out recommendations for indictments against CZ, local executives, and those of several other crypto-related firms.
The committee in question is led by congressional deputy Ricardo Silva and recommends further investigation into the crypto platform – separate from an investigation into Binance already underway by the local regulator CVM.
Unauthorized Financial Activity Accusations
The report singles out CZ – as well as Binance Brazil executives Thiago Carvalho, Daniel Mangabeira, and Guilherme Haddad Nazar – as people to be potentially investigated for unauthorized financial activities, including the offer of unauthorized securities training, which is also the reason for CVM’s investigation.
The executives have also been accused of improper management practices.
“(Binance has) set up an opaque network of legal entities, all controlled directly or indirectly by Zhao, without defined business purpose and with no other purpose than evading compliance with the law.”
A further 45 people across multiple companies are also singled out as potential targets for government investigation.
However, it’s worth noting that the recommendation has no legal backing at the moment and could very well end up completely dismissed. The report merely presents the findings of Silva’s committee to members of the Brazilian Congress. It ends with a request for a further investigation into Binance’s affairs, focusing on the financing of unsavory groups and tax dodging.
Binance Denies Wrongdoing
A spokesperson for the leading crypto exchange has already responded to the allegations. According to Bloomberg, Binance remains committed to an open discussion with Brazilian regulators and denies any wrongdoing.
“We went to great lengths to actively collaborate with the committee. (We) strongly reject any attempts to make Binance a target or even to 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.”
Although Binance has so far remained unshaken in its disputes with two separate U.S. regulators – as well as watchdogs in Belgium and other countries, the platform is beginning to feel the strain of regulatory pressure combined with lukewarm market conditions.
In recent days, Binance has returned to Belgium, exited the Russian market completely after selling local assets to CommEx, and performed maintenance on several trading pairs in a bid to ensure constant market quality.
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