The Congressional Committee of Brazil noted that Binance was running a pyramid scheme and operating while bypassing the regulators. The case is now for the Brazilian police to look after.
A congressional committee in Brazil has made allegations against Binance, asserting the platform’s involvement in a fraudulent pyramid scheme. The committee also accuses Changpeng “CZ” Zhao, the CEO of Binance, of having ulterior motives in the establishment of multiple companies in the region.
The statement from the committee reads:
“BINANCE was one of the companies used in the fraudulent financial pyramid scheme attributed to former waiter Glaidson Acácio dos Santos”.
Binance in Brazil
Brazil’s congressional committee has put forth a recommendation to bring charges against three prominent figures associated with the Binance cryptocurrency exchange.
The individuals in question are CEO Changpeng Zhao, Brazil’s General Director Guilherme Haddad Nazar, and Latin America’s Institutional Relations Director Daniel Mangabeira.
In its allegations, the committee also added that Binance conducted transactions worth USD $791.7 million while bypassing Brazilian regulators. “BINANCE moved BRL 40 billion in 2021 without Acesso, the regulated institution, having any control over who the customers were and whether the origin of the funds was legal,” the report reads.
Note that the charges are still recommendations from Brazil’s Congressional Committee. The Brazilian police now hold the responsibility of determining the subsequent steps in action. Furthermore, the comprehensive 508-page report primarily delves into the signs of questionable practices in the management of cryptocurrency-related businesses.
Charges against Binance Chief CZ
Additionally, the claim suggests that Binance CEO CZ established several companies within Brazil as a means to circumvent adherence to local financial regulations.
“Changpeng Zhao, set up an opaque network of legal entities, all controlled directly or indirectly by Zhao, with no defined business purpose and with no other purpose than evasion of compliance with the law,” notedthe report.
The committee contended that this lack of supervision led to a variety of issues, with the most notable being the exploitation of the crypto exchange in a pyramid scheme. Additionally, it makes reference to an alleged statement made by Binance’s chief compliance officer, claiming that the company aimed to evade regulatory measures at any expense.
The report also notes that local authorities in Brazil don’t have enough tools to track users. “Controller Changpeng Zhao claims by the media that the company’s headquarters are wherever it is located at the time, reflecting a deliberate approach to avoid the costs of regulation borne by any legitimate company,” the report notes.
Binance’s chief CZ has been facing regulatory scrutiny from across the world. Some of the US regulators have also blamed CZ for the downfall of the crypto exchange FTX. They assert that CZ’s tweets, which were posted prior to the exchange’s downfall, cast uncertainty on its liquidity and financial stability. Moreover, they claim that these tweets triggered a surge in withdrawals, ultimately leading to the exchange’s demise.
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Author Bhushan Akolkar
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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It’s important to note that Binance strictly prohibits intentional self-trading on the platform, categorizing it as a form of market manipulation.
Leading global cryptocurrency exchange Binanceis set to roll out its self-trade prevention (STP) feature to help users reduce unnecessary self-executed orders and related transaction fees. The exchange said the tool primarily caters to application programming interface (API) traders who use automated trading programs with its trading engine.
According to an official announcement on October 11, this new functionality will be available to all users engaged in spot and margin trading on October 26.
Binance Users Can Now Check for Expired Orders
The company saidthat upon the full integration later this month, the “expire maker” STP mode will become the default setting for all trading pairs and orders on Binance’s spot and margin trading platforms.
Users can check for orders that have expired due to the STP function on Binance’s official website, the Binance App, and the Binance Desktop App via the transaction history page.
Binance first introduced the tool in January 2023, and it’s specifically designed to prevent the execution of orders that might lead to self-trading. Later in August, the company rolled out the STP feature for USD-margined futures on API. The tool allows users to turn this feature on or off as needed.
The firm has now extended the service to spot and margin traders to prevent users from incurring unnecessary fees and unintentionally executing trades.
“Without STP, unintentional self-trading could happen in a competitive marketplace. For example, when orders from separate trading units of the same firm, using the same unique UID as unrelated trading strategies, happen to post orders that trade with each other,” Binance said.
Binance Monitors for Market Manipulation
It’s important to note that Binance strictly prohibits intentional self-trading on the platform, categorizing it as a form of market manipulation. The company’s market surveillance team is actively monitoring for such activity and other forms of market manipulation.
Binance said the team uses advanced tools to track intentional self-trading and investigate any offenders.
“Our market surveillance team actively monitors market activity to identify intentional self-trading and any other forms of market manipulation. Binance has extensive tools to track intentional self-trading and investigate offenders,” revealed the company.
With this implementation of the self-transaction prevention feature, Binance aims to create a more secure and efficient trading environment for its users, particularly for those engaged in automated trading. The new system will help traders avoid accidental self-trades and the associated fees, promoting fair and transparent trading practices on the platform.
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Author Chimamanda U. Martha
Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
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