Jul 04, 2022 16:06 2 min read
The top state-level court in São Paulo froze BRL 451.6 million (USD 85 million) in customer accounts of capital, a multi-currency bank that connected Binance, the world’s largest cryptocurrency exchange, to several Brazilian banks. According to the finance newspaper Valor, the amount belongs to Brazilian clients.
Capital and Binance have been in litigation since the former stopped processing withdrawals and deposits from Binance customers on June 16, leaving account holders unable to access their money. Binance attempted to re-establish the service while moving to recover the money and get out of the contract, alleging a breach of contract by Capital.
Withdrawals from accounts linked to Binance were suspended due to non-compliance with the rules of the Brazilian Central Bank. The Central Bank requested the individualization of accounts as a way to provide more security to customers and prevent money laundering. Binance was reportedly the only Capital customer not to comply. Transactions were recorded in the name of Capital, not the clients.
In a tweet, Binance said Capital is no longer a partner, adding that the integration process of its new trading partner in Brazil, Latam Gateway, “is underground and will be completed soon, and transactions (deposits and withdrawals) will be fully normalized. ”
Crypto investment remains unregulated in Brazil. A bill seeking to establish basic rules for the crypto market is waiting for congressional approval.
The original bill was presented in 2015 but was not approved in the House until December 2021. In April of this year, the Senate made some changes to the text, which then returned to the House for further deliberation.
The proposal classifies crypto exchanges as financial institutions, meaning they can only operate with regulatory approval. The bill also gives the executive branch the power to choose which institution will oversee and further regulate the crypto market. Brazil’s Central Bank and Securities Commission (CVM) are most likely to be put in charge of the task.
Market analysts expect the bill to be fully approved by the end of this month, before the congressional recess before the 2022 electoral campaign.