A Brazilian congressional committee has advised prosecutors to potentially indict Binance CEO Changpeng Zhao and three other executives over allegations of operating unlawful financial schemes in Brazil.
In a 500-page report on October 10, the committee accused Zhao and local Binance representatives of deceptive practices, offering unauthorized securities trading, and evading compliance requirements.
Allegations of Criminal Conspiracy
Per the report overseen by Deputy Ricardo Silva, Zhao and associates allegedly formed a network of opaque corporate entities to intentionally bypass regulations.
The committee recommended indicting 45 other individuals tied to crypto companies like 123milhas for alleged involvement in illicit schemes.
Calls for Broad Binance Probe
Noting suspicions around Binance’s global regulatory problems, the committee proposed a sweeping investigation into all of Binance’s Brazilian operations focusing on potential tax evasion, money laundering, terrorism funding and organized crime links.
The report also urged Brazil’s SEC to probe Binance for flouting orders to stop offering derivative products in the country.
Seeking Accountability at Top Levels
While non-binding, the scathing recommendations pressure Brazilian authorities to scrutinize Binance’s local activities.
By advising prosecutors to pursue legal actions against Zhao himself, the committee took aim at ultimate accountability at Binance’s highest levels.
The expansive probe calls illustrate Brazil’s increasingly assertive stance on policing the still-new crypto sector as adoption grows.
Binance stated it remains committed to cooperating with Brazilian officials, but the allegations suggest a troubling view of the exchange’s perceived regulatory compliance and market practices.