Brazil’s CVM Says no to Binance Futures Trading: In a statement released on Monday, the Comissão de Valores Mobiliários (CVM) — Brazil’s securities regulator — announced the ban on Binance crypto derivatives trading in the country. According to the CVM, Binance is not authorized to offer securities trading in Brazil.
For the CVM, crypto derivatives constitute a securities offering regardless of whether the underlying asset like Bitcoin (BTC) is not a security. Following the statement, Binance must cease providing cryptocurrency derivatives products to residents in Brazil or face daily fines in the equivalent of $186 (or 1,000 Brazilian Real).
The prohibition of Binance’s crypto derivatives trading is only the latest in a series of anti-crypto policies in Brazil. As is the case across many countries in Latin America, cryptocurrency exchanges are finding it difficult to obtain banking services in Brazil.
Platforms like Latoex, Acesso Bitcoin, and Xdex shuttered their operations in the country earlier in the year. Before announcing the closure of its business, Xdex was one of the largest crypto exchanges in Brazil.
The difficulties faced by operators in the Brazilian crypto scene have come in the absence of any specific regulations. Back in February, the country’s tax body mandated that all companies dealing in cryptocurrencies must report their transactions or face fines.
Binance is currently the third-largest Bitcoin futures exchange with a daily average trading volume of over $2 billion. BitMEX, which used to be the leading crypto derivatives scene, has seen its dominance disappear in recent months with the likes of Huobi and OKEx leading the market.
The growth of the crypto derivatives scene is seeing the market segment accounting for a significant portion of the total cryptocurrency trading volume. As previously reported by CryptoPotato, crypto derivatives trading in Q1 2020 was north of $2 trillion, an amount of almost 25% of the $8.8T cryptocurrency trading total recorded during the period. Q2 appears on track to surpass this record with May’s volume topping $602 billion.
With the massive growth in the crypto derivatives market has come calls for robust regulations from several quarters. At the start of the year, Heath Tarbert, chairman of the U.S. Commodity Futures Commission (CFTC), declared the need for further cryptocurrency derivatives regulations.
The post Binance Ordered To Stop Offering Derivatives Trading Products In Brazil appeared first on CryptoPotato.
