Ponzi scandal drags Binance into turmoil in Brazil

A Brazilian congressional committee has called for criminal charges to be brought against Binance CEO Changpeng Zhao and three senior Binance executives, based on accusations of fraudulent management and the illegal sale of securities.

CZ and Binance hit by fraudulent allegations in Brazil

The year 2023 continues to be particularly difficult for Binance and its senior executives, who are currently facing prosecution in some states. A committee of the Brazilian Congress recently advocated legal action against the CEO of BinanceChangpeng Zhao nicknamed “CZ” along with three other company executives. In fact, an investigation calls into question CZ with accusations of pyramid schemes – in other words, a ponzi – in Brazil.

In a 500-page final report published on October 10, this committee, under the leadership of MP Ricardo Silva, accused CZ and local Binance leaders of various offences, including fraudulent management practices, unauthorized transactions and trading in unregistered securities.

These accusations suggest that the CEX (Centralised Exchange), as well as Zhao and other executives, set up a complex network of legal entities, mainly controlled by CZ, apparently in the purpose of avoiding legal compliance rather than serving legitimate business objectives.

Committee recommendation that the Brazilian Public Prosecutor’s Office investigate Binance’s operations

Following these accusations, the committee, made up of 28 legislators from the lower house of Brazil’s National Congress, recommended that the Federal Public Prosecutor’s Office is conducting an in-depth investigation into all Binance in Brazil, focusing on potential offences such as tax evasion, money laundering and the financing of organized crime and terrorism.

In addition, he suggested that the Brazilian Securities and Exchange Commission (CVM) take a close look at the sale of derivatives by Binance. CEX seems to express its commitment to working with this committee and local authorities in Brazil to resolve these issues.

In addition to the charges against Binance, the report suggested the possibility of prosecuting 45 other individuals who are suspected of being involved in criminal activity, many of whom have links to various crypto businesses, including travel company 123milhas… Case to follow!