Brazil Accuses Binance of Operating Pyramid Scheme, Threatening Reputation

The head of Binance Brazil, Guilherme Haddad, has been summoned to testify before the Brazilian Parliament’s probe into suspected pyramid schemes in the country.

The request, made by Brazilian Deputy Alfredo Gaspar, awaits a decision by the Parliamentary Commission of Inquiry (CPI) on June 27.

If approved, Haddad will be obligated to answer questions before the Brazilian Chamber of Deputies, shedding light on Binance‘s activities in the country, its relationship with B Fintech (its official representative), and any connections with companies facing legal issues for consumer harm.

Gaspar has alleged that Binance facilitated pyramid schemes in Brazil through asset transfers, citing a case where the São Paulo Justice blocked R$ 500 thousand reais in Binance for suspected involvement in a pyramid scheme.

He stressed the importance of understanding Binance’s operations, its affiliation with B Fintech, and potential partnerships with Brazilian financial services companies that fall within the scope of the investigation.

The regulatory authorities in Brazil have highlighted Binance’s failure to comply with regulations imposed by different countries as a reason for the summons.

Binance’s activities in Brazil are also being investigated by the Federal Prosecutor’s Office and Federal Police for potential involvement in assisting clients in bypassing cryptocurrency derivatives investment bans.

The summons of Haddad comes at a time when Binance is facing increasing scrutiny from regulators around the world. The company has been accused of operating without proper licensing in several jurisdictions, and it has been fined by regulators in several countries.