Brazil’s congressional committee noted that Binance was running a pyramid scheme and operating while bypassing regulators. The matter now has to be looked into by the Brazilian police.
A Brazilian Congress committee has made these allegations Binance, emphasizing the platform’s involvement in a fraud pyramid scheme. The committee is also accused Changpeng “CZ” ZhaoThe CEO of Binance is accused of having ill intentions in founding several companies in the sector.
The committee’s statement reads:
“BINANCE was one of the companies used in a fraudulent financial pyramid scheme attributed to former veteran Gladson Acasio dos Santos”.
Binance in Brazil
Brazil’s congressional committee has recommended charges against three prominent figures linked to the Binance cryptocurrency exchange.
The individuals in question are CEO Changpeng Zhao, Brazil General Director Guilherme Haddad Najar and Latin America Institutional Relations Director Daniel Mangabeira.
In its charges, the committee also said that Binance conducted transactions worth US$791.7 million bypassing Brazilian regulators. “BINANCE transferred BRL 40 billion in 2021 without access to Acesso, a regulated entity that had no control over who the clients were and whether the origin of the funds was legal,” the report said.
Note that the charges are still recommendations from Brazil’s congressional committee. Brazilian police now have the responsibility to determine the next steps of action. Furthermore, the comprehensive 508-page report primarily highlights signs of questionable practices in the management of cryptocurrency-related businesses.
Allegations against Binance Chief CZ
Additionally, the claims reveal that Binance CEO CZ set up multiple companies within Brazil as a means to circumvent compliance with local financial regulations.
“Changpeng Zhao established an opaque network of legal entities, all directly or indirectly controlled by Zhao, with no defined business purpose and no purpose other than to avoid compliance with the law.” noted Report.
The committee argued that the lack of oversight led to a variety of issues, the most notable of which is the exploitation of crypto exchanges in pyramid schemes. Additionally, it references a purported statement made by Binance’s Chief Compliance Officer, claiming that the company aims to avoid regulatory measures at all costs.
The report also said that local authorities in Brazil do not have adequate tools to track users. “Comptroller Changpeng Zhao has been claimed by the media to have a deliberate approach to avoiding the regulation costs borne by any legitimate company, regardless of where the company’s headquarters are located at the time,” the report said. it shows.”
Binance chief CZ is facing regulatory scrutiny from around the world. Some US regulators have also blamed CZ for the collapse of crypto exchange FTX. He claims that CZ’s tweets, which were posted before the exchange’s collapse, had created uncertainty over its liquidity and financial stability. Furthermore, they claim that these tweets led to an increase in withdrawals, which ultimately led to the exchange’s closure.
Bhushan is a fintech enthusiast and has a good grasp of understanding the financial markets. His interest in economics and finance drew his attention to the newly emerging blockchain technology and cryptocurrency markets. He is in a constant process of learning and keeps himself motivated by sharing his acquired knowledge. In his spare time he reads adventure fantasy novels and occasionally explores his culinary skills.
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