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Binance to halt derivatives offering in Brazil

Updated: Jul 25, 2024
Published: Jul 7, 2020
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Brazil Derivatives Ban

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The Securities and Exchange Commission in Brazil (CVM) has ordered Binance to halt offering derivatives in Brazil. The basis of the order is that all derivatives are considered securities regardless of the underlying asset and Binance does not have authorization from the Securities and Exchange Commission in Brazil.

Binance Journey

Originally, Binance was a spot-only exchange that did not support fiat currencies. Last year, the exchange opened several fiat onramps, one of which was the Brazilian Real (BRL) through Latamex. In addition to the multitude of fiat onramps, Binance began offering margin trading on select pairs before expanding further into futures with ‘Binance Futures’ as well as options. The latter however is only available to buy and customers cannot write/sell options on that platform.

Derivative Restrictions

The resistance from regulatory agencies from around the world to crypto-derivatives is not new and is based on the protection of inexperienced retail traders. 12-months ago, the UK’s FCA was contemplating a ban on crypto-derivatives which could have affected BitMEX in the country. Of course, the United States’ SEC has been very restrictive of crypto-derivatives as even FTX and Binance had to open separate platforms there (FTX.US and Binance US) with no derivatives offering. While cryptocurrencies as an asset class may see further regulations in the near future, derivatives may take a longer time.

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