Binance announced on Wednesday that it has reached an agreement with Brazil’s Securities and Exchange Commission (CVM) following a years-long dispute over the exchange’s offering of derivatives products in the country.
In 2020, Brazil’s CVM banned Binance from offering derivatives, classifying such contracts as securities and stating that Binance was not authorized to act as a securities intermediary in Brazil.
As part of the settlement, CVM approved an agreement under which Binance will pay 9.6 million reais, equivalent to $1.75 million U.S. dollars.
A Binance spokesperson confirmed that the exchange does not currently offer derivatives in Brazil and is not permitted to do so. “Since the regulator’s first communication to Binance in 2020, the exchange has taken all steps and necessary actions to respond to the authority and comply with local requirements,” the spokesperson said.
“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,” he added.
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Despite derivatives ban, Binance’s payment provider in Brazil, Latam Gateway, was granted a license by the country’s central bank to function as a payment institution and electronic money issuer.
The license was obtained in 2023, allowing the firm to legally operate and provide its services within the Brazilian financial landscape. Earlier, Binance suspended deposits and withdrawals in Brazilian reals through the government’s payment system Pix. The payments blockage coincided with the end of a deadline imposed by the Brazilain central bank for Pix providers to implement new “know your customer” requirements.
Binance was also reportedly planning to buy banks and payments processors in Brazil as a way into the market. It already signed a memorandum of understanding to acquire Brazilian securities brokerage firm, Sim;paul Investimentos. However, the takeover requires Binance to get approval from both the Securities and Exchange Commission of Brazil (CVM) and the central bank.
Binance has identified Brazil as one of its key global markets. Latam Gateway, on the other hand, serves as a facilitator for foreign companies looking to operate in the country by providing on/off-ramp services for the local currency.
Per its website, Binance is the only cryptocurrency client it serves in Brazil. However, Latam Gateway works with other clients in the gaming industry, including Codashop, Moedaz, and Game Hollywood.