Authorities in Brazil have launched an investigation into crypto exchange Binance for continuing its cryptocurrency derivatives offering to clients despite a stop order issued by the municipality.
According to a report from local media publication Valor Econômico, the Public Ministry and Federal Police in Brazil are looking into alleged financial crime by Binance.
The investigation stemmed from the country’s securities regulator, the Comissão de Valores Mobiliários (CVM), who told the Attorney General of the State of São Paulo that the exchange aided customers in accessing financial derivatives after it was ordered to discontinue the service.
Part of the investigation includes documents that show prints of Binance support screens, where users are instructed to change the language of their site in order to access the Binance Futures platform.
“The futures platform is not available in PT-BR. You can change the language,” read a Binance customer service response in May 2022.
Authorities are now examining who was responsible for giving the order to circumvent the restrictions. The person identified could face anywhere between six months to two years in prison, said Filipe Batich, a White Collar and Compliance Partner at law firm Madrona Fialho Advogados.
Binance reiterated that it does not offer derivatives in the region, when contacted by the newspaper for comment. A spokesperson for the exchange said the exchange would not comment on ongoing investigations and that the exchange operates in compliance with local authorities.
In the U.S., the Commodity Futures Trading Commission (CFTC) has also accused Binance of unlawfully operating a derivatives exchange in the country, in violation of derivatives regulations.