Brazilian authorities have launched an official investigation into Binance (CRYPTO: BNB), the largest cryptocurrency exchange by trading volume, over allegations of financial crimes executed through its derivatives offerings.

O Globo reported that the probe was initiated following a tip-off from the Brazil Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM).

The CVM had reportedly informed the Attorney General of Sao Paolo that Binance may have ignored a "stop order" issued by the state and continued offering crypto derivatives to Brazilian users. 

In response, the Federal Police Prosecutor's Office and the Federal Police have launched an investigation into the matter.

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Binance declined to comment on the ongoing investigation but said that it "does not offer derivatives in Brazil." However, the CVM reportedly presented documents to support its claims against the exchange's denial.

The stop order was issued by the CVM in 2020, and in early 2021, Binance stated its intention to stop offering crypto derivatives in Brazil.

Nonetheless, authorities have allegedly observed Binance continuing to offer derivatives to Brazilian users after the notice.

"We take a collaborative approach in working with regulators and we take our compliance obligations very seriously," Binance said in a statement.

"We do not comment on ongoing investigations," the exchange told O Globo.

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