Binance reportedly transferred $791.7 million USD with no regulatory monitoring, according to a Brazilian house investigation.
Several firms founded by Binance CEO Changpeng “CZ” Zhao in Brazil have been accused of being fronts for a fraudulent pyramid scheme, according to a Brazilian congressional investigation.
According to the allegation, “former waiter Glaidson Acácio dos Santos is responsible for a financial pyramid scheme in which one of the organizations involved was BINANCE.”
According to a lengthy report compiled by the committee, Binance allegedly dealt with around USD $791.7 million in Brazil without informing local officials.
According to Acesso, a regulated institution, “BINANCE transferred BRL 40 billion in 2021 without knowing who the customers were or if the funds originated legally.”
It further claims that CZ, CEO of Binance, set up many firms in Brazil to avoid financial rules there. The committee said that several issues arose due to the lack of control. The use of crypto exchange in a pyramid scam stands out as the most notable.
In addition, it quotes what is said to be a statement made by Binance’s head of compliance. It is said that he made the comment that the company’s goal was to avoid “regulation at all costs.”
It claims that the Brazilian government does not have the resources to monitor its users: “Changpeng Zhao, the firm’s controller, has told the media that the company’s headquarters may be found anywhere the company happens to be at the moment. This is done on purpose to escape the expenses of regulation that every legal corporation must bear.”
This lines up with claims leveled against CZ only recently in the USA. Investors blame him for the failure of the FTX cryptocurrency exchange.
They claim that CZ’s tweets on the exchange’s financial stability and liquidity contributed to its downfall. To add insult to injury, they claim it was the cause of the rush of withdrawals that led to the downfall of the exchange.
The Securities and Exchange Commission (SEC) filed charges against Binance and CZ in June, alleging that they misled users about the platform’s trading rules on the Binance.US platform.
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