A Brazilian congressional committee recommended that local authorities file charges against Binance CEO Changpeng “CZ” and three other Binance executives following an investigation into financial pyramid schemes in Brazil.

On October 10, the committee released a 500-page final report in which it accused Zhao and local Binance executives Daniel Mangabeira, Guilherme Haddad Nazar and Thiago Carvalho of fraudulent management practices, operating without sufficient authorization and offering securities trading services without authorization.

In the report, the committee, led by MP Ricardo Silva, stated that Binance, Zhao and others “established an opaque network of legal entities, all controlled directly or indirectly by Zhao, with no defined commercial purpose and no purpose other than to evade the compliance with the law.”

The report also recommended the indictment of 45 other people, citing “strong evidence” of their alleged involvement in criminal schemes, and the names mentioned are linked to multiple cryptocurrency companies, including the 123milhas travel company, the “18K Ronaldinho” crypto scheme and others.

Silva wrote that since Binance was being accused of failing to comply with regulations in numerous jurisdictions, in Brazil, Binance’s operations were “surrounded by suspicion.”

The committee recommended that the Federal Public Prosecutor’s Office launch an investigation into all of Binance’s operations in Brazil, with a specific focus on tax evasion, money laundering, and the financing of organized crime and terrorism.

Additionally, the committee recommended that the Brazilian Securities and Exchange Commission (CVM) launch an investigation into the sale of Binance derivative products.

The committee stated that despite being told to cease trading derivative products, Binance continued to offer them, which constituted a “repeated violation” of market regulations. Binance is already being investigated by the CVM for allegedly illegally offering derivative products in the country.

The committee’s recommendations were not legally binding and were suggestions for local authorities. Police and other regulatory bodies would decide whether to proceed with further action.

K. Tovar

Source: Cointelegraph

(Referential image source: Kanchanara, Unsplash)

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