Binance will pay the fine to the Brazilian Securities and Exchange Commission (CVM) as part of a settlement following an investigation into the platform’s unauthorized derivatives trading in the country.
The CVM announced the development in an official statement on Wednesday, August 14, 2024, outlining the details of the case and the amount Binance is required to pay.
Prudence Journal recalls that this is just the latest in a string of regulatory issues the platform faces in multiple countries, including the U.S., India, and Nigeria, among others.
Meanwhile, Binance official Tiagran Garmbagan remains in detention in Nigeria over allegations of tax evasion and money laundering.
Regarding the recent crackdown, CVM stated, “The Board of the Securities and Exchange Commission (CVM), in a meeting on 8/13/2024, analyzed proposals for the Term of Commitment of the following administrative sanctioning processes (PAS): PAS 19957.008369/2022–11: B Fintech Technology Services Ltda.
“PAS 19957.008992/2023–47: Gafisa SA, Guilherme Augusto Soares Benevides, and Ian Masini Monteiro de Andrade.
“B Fintech Serviços de Tecnologia Ltda presented a new proposal for a Term of Commitment to terminate PAS CVM 19957.008369/2022–11.
“In a meeting held on 8/29/2023, the CVM Board decided to reject the agreement with B Fintech Serviços de Tecnologia Ltda, as it understood that the execution of the Commitment Term would not be timely and convenient.
“On 2/15/2024, a new proposal for a Term of Commitment was presented, and, after negotiations with the Term of Commitment Committee (CTC), the proponent committed to pay the CVM R$9,600,000.00. The PFE-CVM concluded that there is no legal impediment to the execution of the agreement.
“Therefore, the CTC considered it appropriate and convenient to accept the agreement.
“The Board followed the CTC’s opinion and accepted the signing of a Commitment Term with B Fintech Serviços de Tecnologia Ltda.” CVM stated.
For context, B Fintech Technology Services Ltda is a shell company operated by Binance in Brazil.
In May 2023, a Brazilian court recognized the company as part of the Binance Group.
In July 2020, the CVM ordered Binance to stop offering derivatives trading services in Brazil, stating that it was not authorized to “act as a securities intermediary” and threatening a daily fine of 1,000 reais.
Later, in August 2023, the CVM rejected Binance’s settlement proposal of 2 million reais ($370,000).
In a separate document detailing the settlement terms, the CVM stated that Binance was engaged in “distribution and mediation of operations with securities offered to citizens residing in Brazil without being a member of the securities distribution system and without obtaining the necessary registration or exemption from registration with the CVM.”