Binance Brazil investigated for pyramid schemes.

  • Binance is facing regulatory scrutiny from authorities in the United States, Australia, the Netherlands, and Brazil.
  • Binance.US and its legal team have denied the SEC’s allegations, claiming that they issued misleading statements in the lawsuit.
  • Binance is also being investigated for allegedly assisting customers in bypassing a restriction on crypto derivatives investments in Brazil, in addition to pyramid schemes.

On June 21, Brazilian Deputy Alfredo Gaspar called for Guilherme Haddad, the head of Binance Brazil, to appear before the Brazilian Parliament as part of an investigation into potential pyramid schemes in the country.

The Parliamentary Commission of Inquiry (CPI) is expected to decide on June 27 whether to grant Gaspar’s request for Haddad to appear before Parliament. Depending on the outcome of the vote, Haddad may be required to appear before the Brazilian Chamber of Deputies.

Gaspar’s request stated:

“We can deduce that Binance is entirely involved with the motivation of this CPI, and it becomes essential to understand its performance in the country, its relationship with B Fintech (its official representative), as well as its connection with companies that are legally responsible for harming Brazilian consumers.”

International regulatory pressure mounts on Binance

Brazil has joined the list of regulatory bodies investigating Binance, the world’s largest cryptocurrency exchange, as it faces mounting international regulatory pressure. Regulators in the United States, Australia, the Netherlands, and now Brazil are all scrutinizing Binance.

According to Gaspar, Binance allegedly assisted Brazilian pyramid schemes by transferring assets on March 11, 2023, when “the São Paulo Justice blocked R$ 500 thousand reais in Binance for a suspected pyramid.” He stressed the importance of understanding Binance’s activities, its connection to B Fintech, and any potential ties to companies currently involved in legal disputes that harm Brazilian consumers.

Brazilian regulatory authorities contend that Binance is under intense regulatory scrutiny worldwide due to “the company’s failure to comply with the regulation imposed by each country,” which is why they are proposing the summons.

The Federal Prosecutor’s Office and Federal Police are also investigating Binance’s operations in Brazil for allegedly helping customers bypass a restriction on cryptocurrency derivatives investments.