Cryptocurrency exchange giant Binance has agreed to pay 9.6 million reais ($1.76 million) to the Brazilian Securities and Exchange Commission (CVM) as a settlement for an investigation into its unauthorized derivatives trading in the country, Coindesk reported.
Binance’s Regulatory Struggles in Brazil
CVM initiated the investigation into Binance’s operations in July 2020, accusing the company of offering derivatives trading services without the required licenses. The regulator has ordered Binance to immediately cease its activities and threatened the exchange with a daily fine of 1,000 reais if it continued to operate without proper authorization.
Despite this warning, Binance initially attempted to resolve the matter by offering a 2 million reais ($370,000) settlement in August 2023. However, the CVM rejected this proposal, deeming it insufficient to address the violations.
The CVM maintains that Binance was engaging in “distribution and mediation of operations with securities” without being a registered member of Brazil’s securities distribution system. The CVM’s statement, published today (Wednesday), confirmed that the exchange presented a new proposal in February 2024, which was accepted after discussions with the Term of Commitment Committee (CTC).
Global Implications for Binance
The settlement in Brazil is part of a broader trend of increasing regulatory pressures on Binance globally. As the world’s largest cryptocurrency exchange, Binance has found itself under the watchful eyes of regulators in various countries, many of whom have raised concerns over the company’s compliance with local financial regulations.
Meanwhile, the latest report shows that Brazil leads in financial inclusion in Latin America with 70% adoption of debit or credit cards. The country recently registered 55% card usage and high real-time payments. This trend is attributed to the elimination of barriers to payment infrastructure.
The joint survey by Nubank and Mastercard, based on data from 3.6 million Nubank customers, highlighted the impact of financial inclusion on long-term economic growth.
Additionally, the study noted that Brazil has significantly progressed in financial inclusion compared to other countries in Latin America. The World Bank Global Findex shows that the country has 70% card penetration and a growing trend in real-time payment usage.
This article was written by Jared Kirui at www.financemagnates.com.
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