Binance Agrees to $1.7M Settlement With Brazil’s Securities Regulator

Leading cryptocurrency exchange Binance has agreed to pay $1.7 million to the Brazilian Securities and Exchange Commission (CVM) as a settlement over allegations of offering derivatives products to local investors without authorization.

Binance to Pay $1.7M

The legal case between the duo began in July 2020 when the financial agency issued a warning to Binance, ordering the crypto exchange to stop offering derivatives products to investors in the Latin American country.

The regulatory watchdog argued that Binance was unauthorized to “act as a securities intermediary.” The CVM implied that the crypto trading platform must register with the regulator to become “a member of the securities distribution system” before offering derivatives products to Brazilian investors.

In 2023, the Brazilian regulator refused the crypto exchange’s proposal of $370,000 to settle the matter. On February 15, 2024, a new proposal was presented, and after discussions, both parties agreed to the latest settlement fine.

It is worth noting that the Brazilian financial watchdog is not pessimistic about the crypto market. Earlier this month, the agency approved the first-ever spot Solana exchange-traded fund (ETF), an investment vehicle that allows investment companies to offer SOL to local investors.

Binance and Its Regulatory Woes

Binance’s leading position among centralized crypto exchanges is not without its challenges. The crypto exchange has faced various regulatory clampdown actions from regulatory authorities in countries globally.

The most prominent among them is the United States. In late 2023, Binance and its co-founder Changpeng Zhao (CZ) faced several charges, such as conspiring to violate the Bank Secrecy Act. Part of the settlement involved CZ stepping down from his role as Binance CEO. The crypto exchange also agreed to pay $4.3 billion in settlement.

Other countries that have regulatory battles against Binance include India and Nigeria. A recent report confirmed that the Venezuelan government blocked access to the Binance platform for local users amid post-election conflicts.