Binance to pay USD 1.7M to settle dispute with Brazilian regulator over unauthorized derivatives trading
Binance to pay USD 1.7M to settle dispute with Brazilian regulator over unauthorized derivatives trading
Binance reaches an important regulatory agreement with the Brazilian Securities Commission, closing another chapter in its legal disputes.
Binance, the world's largest cryptocurrency exchange, has agreed to pay 9.6 million reais (approximately $1.76 million) to settle a dispute with the Brazilian Securities Commission (CVM).
This settlement stems from allegations that Binance offered derivatives trading services in Brazil without obtaining the necessary regulatory licenses, CoinDesk reported.
The CVM, Brazil's financial regulatory body, had previously rejected a proposal from Binance in August 2023 to resolve the investigation into its unlicensed derivatives products. The new settlement amount significantly exceeds the 2 million reais ($370,000) that Binance had initially offered last year.
According to the CVM's statement released on August 14, the settlement was reached after Binance submitted a revised proposal on February 15, 2024. Following negotiations with the Term of Commitment Committee (CTC), Binance agreed to pay the 9.6 million reais as a term of commitment to the CVM.
The issue dates way back to July 2020 when the CVM ordered Binance to halt its derivatives trading services in Brazil. The regulatory body argued that Binance was not authorized to operate as a securities intermediary in the country and warned the company of a potential daily fine of 1,000 reais if it did not comply.
The CVM contended that Binance was engaging in "distribution and mediation of operations with securities offered to citizens residing in Brazil" without being a registered member of the securities distribution system or obtaining the necessary registration or exemption from registration with the CVM.
The resolution of this case allows Binance to move forward without the looming threat of further regulatory action from the CVM regarding this specific issue.
Binance's willingness to pay a substantially higher settlement than originally proposed indicates its desire to maintain a positive relationship with Brazilian authorities and continue its operations in one of the largest markets in Latin America.
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