Brazil's CVM Says No To Binance Futures Trading: In a statement released Monday, the Securities and Exchange Commission (CVM), Brazil's securities regulator, announced a ban on trading in Binance crypto derivatives on the country. According to CVM, Binance is not authorized to offer securities trading in Brazil.
For CVM, cryptocurrency derivatives constitute an offering of securities regardless of whether the underlying asset like Bitcoin (BTC) is not a security. After the declaration, Binance must stop providing cryptocurrency products to residents in Brazil or face daily fines in the equivalent of $ 186 (or 1,000 Brazilian reals).
Binance's cryptocurrency derivatives trade ban is just the latest in a series of anti-crypto policies in Brazil. As is the case in many Latin American countries, cryptocurrency exchanges have difficulty obtaining banking services in Brazil.
Platforms like Latoex, Acesso Bitcoin and Xdex closed their operations in the country at the beginning of the year. Before announcing the closure of its business, Xdex was one of the largest cryptocurrency exchanges in Brazil.
The difficulties operators face in the Brazilian cryptocurrency scene have occurred in the absence of specific regulations. In February, the country's tax agency ordered that all companies operating with cryptocurrencies must report their transactions or face fines.
Trading of cryptocurrency derivatives gains in importance in the market
Binance is currently the third largest Bitcoin futures exchange with an average daily trading volume of over $ 2 billion. BitMEX, which used to be the leading scene for crypto derivatives, has seen its dominance disappear in recent months with Huobi and OKEx leading the market.
The growth of the cryptocurrency derivatives scene is seeing that the market segment represents a significant part of the total volume of cryptocurrency trading. As previously reported by CryptoReport, trading crypto derivatives in the 1st quarter 2020 went north of $ 2 trillion, an amount of almost 25% of the total $ 8.8T cryptocurrency trading recorded during the period. Q2 appears to be on track to break this record with May volume exceeding $ 602 billion.
With the massive growth in the cryptocurrency derivatives market, multiple quarterly requests for strong regulations have emerged. Earlier this year, Heath Tarbert, chairman of the United States Commodity Futures Commission (CFTC), stated the need for more regulations on crypto derivatives.