Key Takeaways
- Brazilian Securities and Exchange Commission noted that Binance offered derivatives trading services in the country without receiving the corresponding license.
- CVM had initially rejected Binance’s 2023 proposal to pay $365,000 to end the probe
Crypto exchange Binance has agreed to pay $1.76 million to Brazilian regulators to settle allegations of unlicensed derivatives trading in the country. This settlement with the Comissão de Valores Mobiliários (CVM), Brazil’s securities regulator, concludes a year-long investigation into Binance’s activities.
The regulatory scrutiny began in July 2020 when the CVM ordered Binance to cease its unauthorized derivatives trading services in Brazil, warning that the exchange was not authorized to “act as a securities intermediary.” The CVM threatened Binance with a daily fine of 1,000 reais for non-compliance
Despite the CVM’s order, Binance continued its operations, which led to further action from the regulator. The CVM alleged that Binance had been engaging in “distribution and mediation of operations with securities” without being a registered member of Brazil’s securities distribution system.
In an attempt to resolve the issue, Binance proposed a settlement of 2 million reais (approximately $370,000) in August 2023. However, the CVM rejected the offer, citing insufficient evidence that the alleged violations had stopped. The CVM’s Settlement Committee (CTC) highlighted the severity of the infractions, including potential obstruction of regulatory oversight, and recommended rejecting the proposal.
By 2021, around 8% of Brazil’s population had invested in cryptocurrencies, placing the country 14th globally in crypto adoption. The increasing popularity of digital assets in Brazil led the CVM to intensify its probe into Binance’s operations, particularly focusing on the exchange’s derivatives trading services offered without the required licenses.
In February 2024, following discussions with the CVM’s Term of Commitment Committee (CTC), Binance presented a new settlement proposal, which was eventually accepted by the regulator. The CVM confirmed that the exchange agreed to pay $1.76 million to settle the case, marking the end of the investigation.
The CVM’s statement reiterated that Binance had been engaging in “distribution and mediation of operations with securities” without being a registered member of Brazil’s securities distribution system.