Brazil’s SEC bans Binance crypto derivatives citing regulatory concerns
Brazil’s financial markets regulator, the Securities and Exchange Commission (CVM) has banned crypto exchange Binance from offering derivative products in the country.
According to the order on July 6, CVM said derivative contracts are securities, regardless of the underlying assets, and Binance “does not hold authorization” to act as a securities intermediary in Brazil.
“It remains evident that the company Binance Futures, through the webpage ‘www.binance.com,’ captures customers residing in Brazil with a public offering of derivative intermediation services…; the aforementioned company does not hold authorization from this Securities and Exchange Commission to act as a securities intermediary,” the order reads.
As per the orders of closure of Binance derivatives, the company must also instantly stop advertising such derivative products. All such soliciting must be stopped on various platforms, including online social media channels. Failure to comply with the directions would attract a hefty penalty of $188 per day.
The notice reflects increasing investor interest in trading derivatives which let traders make bets on the price of cryptocurrencies without the need for actual delivery.
Brazil’s move towards cryptocurrency regulation took a step closer last year after the country’s parliament established a commission to consider the matter. Although their new president lacks basic knowledge about what Bitcoin actually is, still the country has been the biggest cryptocurrency hub in Latin America and generates the highest turnover in all the region.
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