Binance has agreed to pay security regulators in Brazil a fine equivalent to $1.75 million for acting as a “securities intermediary” by offering derivatives trading in the country without a proper license.
The settlement of 9.6 million Brazilian reais was revealed Tuesday by Brazil’s Securities and Exchange Commission (CVM), which says it decided to accept the payment amount and finally put its years-long feud with Binance, the world’s largest crypto exchange, to bed.
A spokesperson for the exchange told Decrypt that throughout mediation with the regulator, Binance had taken "all steps and necessary actions" to respond to the CVM and comply with local requirements.
"CVM's board decision to accept the proposed Term of Commitment reaffirms that the adjustments and upgrades made by Binance throughout time are sufficient for the regulatory agency," the spokesperson said.
The CVM first accused Binance Futures of illegally operating in Brazil without proper approval in July 2020. The agency’s view is that crypto derivatives constitute securities offerings within the country.
Over the next four years, Binance and the CVM haggled back and forth over an appropriate sum the exchange should pay the Brazilian government as a fine. At one point, Binance offered to pay 1 million reais ($182,000 at writing), with roughly a third of that sum earmarked to fund scholarships for Brazilian students interested in studying the regulation of crypto derivatives. The CVM turned down the offer.
Last year, Binance doubled the proposed settlement, but that offer, too, was rejected. Eventually, the company proposed paying 8 million reais ($1.46 million), a number that the CVM successfully bumped up to the final settlement, government documents reveal.
Binance is now banned from offering derivatives products in Brazil, and no longer does so.
However, the crypto giant may have gotten off with just a speeding ticket in the lucrative market: a recent report from Kaiko Research found that crypto trading volume denominated in Brazilian currency eclipsed $6 billion in just the first four months of this year.
Editor's note: Adds comments from Binance spokesperson.
Edited by Ryan Ozawa.