TechFlow reported on October 11 that, according to Bloomberg, a committee in Brazil's Congress has recommended prosecuting four senior executives of Binance, including CEO Changpeng Zhao. The committee accused Zhao and three local Binance executives of fraudulent management, issuing or trading securities without prior authorization, and operating a financial institution without permission. Lawmakers also recommended that Brazil’s securities regulator (CVM) investigate Binance's sale of derivatives. Comprised of 28 lower house representatives, the committee further suggested the Office of the Federal Prosecutor review tax compliance by Binance's local operations. The committee has been investigating cryptocurrency-related Ponzi schemes in Brazil. While its recommendations are non-binding, actual prosecutions will be decided by Brazilian authorities.
In a statement emailed to Bloomberg, Binance said it had "made every effort" to actively cooperate with the committee. However, given Binance's leadership position in Brazil and globally, the exchange "strongly opposes any attempts to target Binance, or accuse its users and employees of misconduct, even in the absence of evidence."
Previously, Binance's Brazilian subsidiary has already been under investigation by CVM over derivative products sales. In August, CVM rejected a settlement offer worth 2 million reais proposed by local Binance executives. The Brazilian subsidiary now faces further penalties.
