According to the official statement of the Brazilian Financial Regulatory and Control Agency (CVM), Binance, one of the largest cryptocurrency exchanges in the world, is being investigated for allegedly bypassing stop orders.
What are stop orders?
- Stop orders – A sell order is a type of order on a cryptocurrency exchange that allows traders to set a target level for exiting a position. For example, if a trader buys bitcoin for $50,000 and sets a stop order at $45,000, the sell order will automatically execute if the price of bitcoin falls to this level.
How did Binance circumvent stop orders in Brazil?
According to the CVM, Binance customers in Brazil found ways to bypass stop orders, which resulted in a loss of funds for other traders. Specific details of the breach were not disclosed, but CVM warned that it has a significant impact on traders’ investment strategy and risk exposure.
Binance’s response and prospects for investigation.
Binance has not yet commented on this investigation, but the company has previously stated that it complies with all rules and regulations regarding their operations. The investigation could have a significant impact on Binance, as Brazil is one of the largest economies in the world and an important market for cryptocurrencies.
It is worth noting that this is not the first time Binance has been investigated by regulators. In 2021, the Hong Kong Financial Services Commission launched an investigation into Binance for offering services that could be considered securities without the necessary license.
Binance’s investigation in Brazil emphasizes the importance of compliance with rules and regulations in the cryptocurrency industry. Although Binance has not decided on its response to this case, it is worth noting that the company is growing very fast and has an influential position in the industry.