Crypto exchange Binance and CZ accused again: Fraud, Ponzi and other violations

The Binance crypto exchange has just fallen into the clutches of Brazilian justice. While he is working to conquer the Brazilian market, a case breaks out that could lead to the closure of the crypto exchange. Between the accusations of fraudulent management, offering securities without prior authorization, operating a financial institution without authorization, etc., CZ risks indictment. Details below.

Binance Accused of Facilitating Crypto Ponzi Scam

The Brazilian Congress’s accusations against Binance could, if they prove true, signal the end of the crypto exchange’s barely begun reign in Brazil. Binance is accused of supporting the crypto Ponzi scam scheme attributed to politician Glaidson Acácio dos Santos.

In a very detailed report, the Brazilian congressional commission states that Binance completed approximately $791.7 million in transactions in Brazil. She maintains “that Brazilian regulatory institutions have no information on the identity of clients or the legality of the origin of the funds”. This muddy affair did not fail to splash the company’s president, Changpeng Zhao (CZ).

CZ and three other Binance executives face indictment

In its very detailed report, the commission made up of 28 representatives of the Lower House directly attacked the boss of Binance:

“Changpeng Zhao established an opaque network of legal entities, all controlled directly or indirectly by Zhao, with no defined business objective and no purpose other than to avoid complying with the law.”

To this end, the commission recommends the indictment of CZ and three other senior executives of the company. The charges are multiple: “fraudulent management, offering or trading of securities without prior authorization and operation of a financial institution without authorization”. Binance will also have to answer for “repeated violation of securities market rules”.

If the Brazil episode has just started, Binance, which is accused of links with Hamas, is still in the sights of French, Australian and American regulators. For example, several investors blame Binance and CZ for triggering the fall of FTX.

At the same time, Binance still has the SEC on its heels. The projects announced by Binance in Brazil thus enter the zone of uncertainty. Likewise, the global ambitions of the crypto exchange are becoming less and less achievable.

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