Binance agrees to $1.76 million settlement with Brazilian authorities

Binance, the largest crypto exchange, has finally settled with Brazilian regulators for $1.76 million over allegations of unlicensed derivatives trading.

This comes after a year-long investigation into the exchange into its activities in Brazil.

Binance derivatives trading allegations

The Brazilian Securities and Exchange Commission (CVM) asked Binance to suspend its derivatives trading services in the country, citing that the exchange was not authorized to operate as a securities intermediary in July 2020. The CVM threatened Binance with a daily fine of 1,000 reais if he did not comply.

In August 2023, Binance proposed a 2 million reais ($370,000) settlement to resolve the issue, but the CVM rejected it as insufficient. On February 15, 2024, Binance submitted a revised proposal and, after negotiations with the Commitment Term Committee (CTC), agreed to pay 9.6 million reais ($1.76 million) to the CVM.

In a statement released on Wednesday, the CVM confirmed the news, noting that Binance had engaged in the distribution and mediation of securities transactions for Brazilian residents without being a member of the securities distribution system or obtaining the necessary registration or ‘exemption from registration at the agency. .

This is not the first time Binance has faced fines related to regulatory issues. Last month, India’s Financial Intelligence Unit (FIU) fined the exchange $2.25 million for not following anti-money laundering regulations. In May, Canada also fined the company $4.4 million for failing to report transactions of more than C$10,000 and failing to register as an FMSB.

Cryptocurrency adoption increases in Brazil

Economic turmoil in Brazil, marked by high inflation and a declining currency, has led to a notable increase in cryptocurrency adoption. As the local currency weakens, many Brazilians are turning to digital assets to safeguard their finances.

By 2021, around 8% of Brazilians had ventured into cryptocurrency investments, making the country the 14th highest in global adoption rates. Brazil has also made significant progress in financial inclusion compared to its Latin American peers. The World Bank Global Findex recently reported 70% card usage and an increase in real-time payment systems.

The Brazilian government has supported this trend by introducing the Pix payment system in 2020, a digital platform that has made it easier for people to engage in crypto transactions.

Despite facing regulatory issues, domestic crypto exchanges have continued to grow. With increasing digital literacy and a better understanding of digital finance, more Brazilians are seeing crypto assets as a viable investment alternative.

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