Binance’s global regulatory woes continue with the latest episode happening in Brazil where the largest crypto exchange in the industry is expected to pay a fine of $1.7 million for derivatives trading violations.
Binance will be paying $1.7 million to the Brazilian Securities and Exchange Commission (CVM) as a settlement following an investigation into its unauthorized derivatives trading in the country.
The development was announced by CVM via an official statement on its website spelling out the details of the case and the amount Binance is expected to pay.
“ The Board of the Securities and Exchange Commission (CVM), in a meeting on 8/13/2024, analyzed proposals for the Term of Commitment of the following administrative sanctioning processes (PAS):
- PAS 19957.008369/2022–11: B Fintech Technology Services Ltda.
- PAS 19957.008992/2023–47 : Gafisa SA, Guilherme Augusto Soares Benevides and Ian Masini Monteiro de Andrade.
- B Fintech Serviços de Tecnologia Ltda presented a new proposal for a Term of Commitment to terminate PAS CVM 19957.008369/2022–11.
In a meeting held on 8/29/2023, the CVM Board decided to reject the agreement with B Fintech Serviços de Tecnologia Ltda, as it understood that the execution of the Commitment Term would not be timely and convenient.
On 2/15/2024, a new proposal for a Term of Commitment was presented, and, after negotiations with the Term of Commitment Committee (CTC), the proponent committed to pay the CVM R$9,600,000.00. The PFE-CVM concluded that there is no legal impediment to the execution of the agreement.
Therefore, the CTC considered it appropriate and convenient to accept the agreement.
The Board followed the CTC’s opinion and accepted the signing of a Commitment Term with B Fintech Serviços de Tecnologia Ltda.” CVM Stated
For context, B Fintech Technology Services Ltd. is a shell company operated by Binance in Brazil.
In May 2023, a Brazilian court recognized that the company was part of Binance Group.
CVM initiated the investigation into Binance’s operations in July 2020, accusing the company of offering derivatives trading services without the required licenses.
Binance tried to settle the matter by offering a paltry settlement fee of $370,000 to CVM which was turned down.
Both parties finally agreed on a $1.7 million settlement fee according to the official statement by Brazil’s CVM above.
What to Know
- Binance is facing a lot of regulatory challenges in Various countries at the moment given the size and reach of the crypto exchange. The regulatory challenges all seem to border on Binance operating in a country without getting officially approved by relevant authorities.
- Binance recently had a spat with India which it appears to have settled. It just settled its case with Brazil but the crypto exchange is still at loggerheads with Nigeria over claims of Tax evasion and money laundering.
[Nairametrics]