Binance is under investigation in Brazil by the Federal Prosecutor’s Office and Federal Police, according to a report in Valor Econômico newspaper. The cryptocurrency exchange has allegedly been helping clients evade a stop order on cryptocurrency derivatives investments.

According to the newspaper, the Brazilian Securities and Exchange Commission (SEC) reported to the Attorney General of the State of São Paulo that Binance may have continued to offer cryptocurrency derivatives to its clients after the SEC had issued a stop order on those offerings in 2020. Futures contracts are considered securities under Brazilian law regardless of the nature of the underlying assets.

The SEC presented the police with screenshots made in August 2021 showing instructions for Brazilian users to change their language setting to access the Binance Futures section. The SEC also said there was extensive Portuguese-language content with no notices of restrictions on Brazilian users.

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Public information seen by Valor Econômico showed that Binance responded to the charges in February by submitting a proposal for a commitment agreement. No decision has been made on that proposal.

Binance told the newspaper in a statement that it “reiterates that it does not offer derivatives in Brazil, that it operates in compliance with the local regulatory scenario and maintains a permanent dialogue with the authorities for the development of the crypto and blockchain segment in Brazil and in the world.”

Binance has faced similar charges before. It operated in the Canadian province of Ontario for months after it told the Ontario Securities Commission it would cease activities. Binance reportedly acknowledged in February that it was working with United States regulators to settle compliance issues. In March, Binance was sued by the U.S. Commodity Futures Trading Commission over alleged trading violations.

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