Brazil’s Congress puts Binance CEO CZ in crosshairs for indictment
A Brazilian congressional committee has recommended local law enforcement move to indict Binance CEO Changpeng “CZ” and three other Binance executives following a probe into financial pyramid schemes in Brazil.
On Oct. 10 the committee released a 500-page final report accusing Zhao and local Binance executives Daniel Mangabeira, Guilherme Haddad Nazar and Thiago Carvalho of fraudulent management practices, operating without sufficient authorization and offering securities trading without authorization.
In the report, the committee — led by deputy Ricardo Silva — claimed that Binance, Zhao and others “set up an opaque network of legal entities, all controlled directly or indirectly by Zhao, without defined business purpose and with no other purpose than evading compliance with the law.”
The report also recommended the indictment of 45 other people citing “strong evidence” of alleged participation in criminal schemes, with those named linked to multiple crypto companies, including the travel firm 123milhas, the crypto scheme 18K Ronaldinho and others.
Silva wrote that with Binance being accused of regulatory non-compliance in numerous other jurisdictions, in Brazil, Binance’s operations were “surrounded by suspicion.”
The committee recommended the Federal Public Ministry launch an investigation into all of Binance’s Brazil-based operations with a specific focus on tax evasion, money laundering and the financing of organized crime and terrorism.
Additionally, the committee recommended Brazil’s Securities and Exchange Commission (CVM) launch an investigation into Binance’s sale of derivatives products.
The committee claimed that despite being told to cease derivatives products trading, Binance continued to offer them, which constituted a “repeated violation” of market regulations. Binance is already under investigation by the CVM for allegedly illegally offering derivative products in the country.
The committee’s recommendations are not legally binding and are suggestions to local authorities. Police and other regulatory bodies will decide whether or not to move ahead with further action.
Binance told Cointelegraph that it “remained committed” to collaborating with the committee and local law enforcement in Brazil.
Related: Brazilian securities regulator plans sandbox for tokenization in 2024
Binance said while it welcomed constructive debate about the challenges facing the crypto industry, it “strongly rejects the exposure of our users or employees with baseless accusations of bad practices and the attempts to make Binance a target.”
The regulatory hostility against Binance comes amid a broader crackdown on the exchange by authorities elsewhere.
In the United States, Binance is staring down two separate lawsuits from the local commodities and securities regulators, which allege that Binance and its top executives violated numerous financial regulations.
In July, Australia’s financial regulator searched Binance Australia’s offices after having its derivatives license stripped months prior. In May, Binance made an exit from Canada citing the country’s new regulatory controls.
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Thousands of savers face potential losses after a $2.7 million shortfall was discovered at Ziglu, a British crypto fintech that entered special administration.
Politics
Heidi Alexander says ‘fairness’ will be government’s ‘guiding principle’ when it comes to taxes at next budget
Another hint that tax rises are coming in this autumn’s budget has been given by a senior minister.
Speaking to Sunday Morning with Trevor Phillips, Transport Secretary Heidi Alexander was asked if Sir Keir Starmer and the rest of the cabinet had discussed hiking taxes in the wake of the government’s failed welfare reforms, which were shot down by their own MPs.
Trevor Phillips asked specifically if tax rises were discussed among the cabinet last week – including on an away day on Friday.
Politics Hub: Catch up on the latest
Tax increases were not discussed “directly”, Ms Alexander said, but ministers were “cognisant” of the challenges facing them.
Asked what this means, Ms Alexander added: “I think your viewers would be surprised if we didn’t recognise that at the budget, the chancellor will need to look at the OBR forecast that is given to her and will make decisions in line with the fiscal rules that she has set out.
“We made a commitment in our manifesto not to be putting up taxes on people on modest incomes, working people. We have stuck to that.”
Ms Alexander said she wouldn’t comment directly on taxes and the budget at this point, adding: “So, the chancellor will set her budget. I’m not going to sit in a TV studio today and speculate on what the contents of that budget might be.
“When it comes to taxation, fairness is going to be our guiding principle.”
Read more:
Reeves won’t rule out tax rises
What is a wealth tax and how would it work?
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Afterwards, shadow home secretary Chris Philp told Phillips: “That sounds to me like a barely disguised reference to tax rises coming in the autumn.”
He then went on to repeat the Conservative attack lines that Labour are “crashing the economy”.
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Chris Philp also criticsed the government’s migration deal with France
Mr Philp then attacked the prime minister as “weak” for being unable to get his welfare reforms through the Commons.
Discussions about potential tax rises have come to the fore after the government had to gut its welfare reforms.
Sir Keir had wanted to change Personal Independence Payments (PIP), but a large Labour rebellion forced him to axe the changes.
With the savings from these proposed changes – around £5bn – already worked into the government’s sums, they will now need to find the money somewhere else.
The general belief is that this will take the form of tax rises, rather than spending cuts, with more money needed for military spending commitments, as well as other areas of priority for the government, such as the NHS.
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