Elon Musk and X Corp Legal Struggles in Brazil Escalate, 24-Hour Ultimatum to Appoint Legal Representative Issued

On Aug 29, 2024 at 11:27 am UTC by · 3 mins read

After shutting down operations in the Latin American nation, X kept its users’ access open. This demonstrated that Elon Musk adopted a careful approach to handling the conflict.

Serial entrepreneur Elon Musk has been given a 24-hour ultimatum to provide a legal representative for X Corp in Brazil. This is all part of the current legal struggles that the Tesla Inc (NASDAQ: TSLA) CEO is facing in the Latin American nation. Failure to do so might attract a ban from the region.

Elon Musk Caught in Between Brazil’s Political Gameplay

It is worth noting that Justice Alexandre de Moraes is leading the efforts to combat disinformation in Brazil. He launched the investigation into Elon Musk in April, accusing him of obstructing accountability. This came after Musk outrightly said he would not comply with a court order to restrict certain accounts.

Most of these accounts belong to supporters of former President Jair Bolsonaro, and quite a number of them have criticized Justice Moraes at some point.

“On September 7th, Brazil will take to the streets in São Paulo to demand the impeachment of Alexandre de Moraes. @elonmusk, you are invited,” Nikolas Ferreira, a Bolsonaro ally, posted on X.

Musk replied:

“No question that Moraes needs to go. Having a ‘justice’ who repeatedly and egregiously violates the law is no justice at all.”

These people were charged with spreading false information about Brazil’s electoral system. As a means of communication, X was asked to offer some details about its users, a request Musk denied.

After that, X decided to shut down its operations in Brazil as it accused the Supreme Court Justice of issuing censorship orders. The X Chairman cited Moraes’ threat to detain one of the company’s representatives in Brazil if the platform did not abide by the orders to take down certain content.

Brazil Toughen Regulations

After shutting down operations in the Latin American nation, X kept its users’ access open. This demonstrated that Elon Musk adopted a careful approach to handling the conflict. However, Moraes’s latest summon might equate to a total suspension from Brazil. Musk believes that the court’s action is against the tenets of free speech.

Unfortunately, this move may negatively impact X’s future in Brazil and even its operation globally. Brazil is generally in a season of tightening regulation for the cryptocurrency industry in its jurisdiction. It also tries to regulate social media content, especially those it considers misleading or harmful to its citizens.

Leading crypto exchange Binance, keen on global compliance, recently settled with the Brazilian Securities and Exchange Commission, popularly referred to as CVM. The exchange agreed to pay 9.6 million reais, which is approximately $1.75 million. The regulator accused the exchange of offering derivatives trading services in the country without authorization.

In the long run, many social media companies may learn from the X issue with Brazil’s authority and set their operations right.

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