After being accused of assisting clients in bypassing cryptocurrency derivatives investment prohibitions, Binance is now being investigated on suspicions that it is operating a pyramid scheme inside Brazil.
Guilherme Haddad, the CEO of Binance Brazil, has been summoned by Brazilian lawmaker Alfredo Gaspar to testify in a parliamentary investigation investigating possible pyramid schemes in the country. On June 27, the Parliamentary Commission of Inquiry (CPI) will decide on Gaspar’s inquiry from June 21.
Porto do Bitcoin, a Brazilian magazine, reports that, depending on the vote result, Haddad may be called to face questions before the Brazilian Chamber of Deputies.
Binance is now under increasing regulatory pressure from across the globe. Gaspar has claimed that Binance helped facilitate asset transfers for Brazilian pyramid schemes, claiming that “on March 11, 2023, the So Paulo Justice blocked R$ 500,000 in Binance for a suspected pyramid.” He stressed the need to be aware of Binance’s business practises, its connection to B Fintech, and any possible ties to enterprises already experiencing legal challenges in Brazil for consumer harm.
Authorities in Brazil have claimed that the planned summons is in response to the worldwide regulatory scrutiny Binance is undergoing, specifically emphasising “the company’s failure to respond to the regulation imposed by each country.” The Federal Prosecutor’s Office and Federal Police are looking into Binance’s Brazilian operations for possibly aiding customers in evading a prohibition on crypto derivatives investments.
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