A Brazilian congressional committee has informed local law enforcement that Binance CEO Changpeng Zhao “CZ” and three other executives could face legal action in connection with a probe into financial pyramid schemes in Brazil.
On October 10, the committee released a lengthy 500-page report accusing Zhao and local Binance executives Daniel Mangabeira, Guilherme Haddad Nazar, and Thiago Carvalho of adopting dishonest management techniques. Additionally, they were charged with operating illegally and engaging in securities trading without the requisite authorization.
Zhao allegedly built a complicated network of legal businesses under his direct or indirect control, according to the study, which was monitored by Deputy Ricardo Silva, Binance, and their friends. With the primary goal of avoiding legal compliance, this network’s corporate mission seemed to lack definition. In addition, the study suggested the indictment of 45 other people based on “compelling evidence” pointing to their participation in numerous criminal activities.
These people had ties to a number of businesses involved in crypt related companies, including the travel agency 123milhas. According to Silva, Binance is looked suspiciously in Brazil due to claims of regulatory noncompliance it has faced in a number of other nations.
The committee recommended that the Federal Public Ministry initiate an investigation into all of Binance’s activities in Brazil with a focus on possible tax evasion, money laundering, and support for terrorism and organized crime.
The committee also suggested that Binance’s sales of derivative goods be looked at by Brazil’s Securities and Exchange Commission (CVM). According to the committee, Binance continued to provide derivative products after being told to halt, which they viewed as a persistent violation of market regulations.
For allegedly marketing derivative products in the nation illegally, Binance is already the subject of a CVM investigation. The local governments and regulatory agencies will determine whether to implement the committee’s recommendations; they are not legally obligated to do so. The committee and local law enforcement in Brazil will continue to be supported by Binance, the company said.
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