The iShares MSCI Brazil Capped ETF (EWZ), a heavily-traded US ETF that tracks Brazilian stocks, crashed more than 13 percent in the premarket Thursday on the back of an emerging political scandal.

Brazilian newspaper O Globo reported late Wednesday that Brazilian President Michel Temer gave his blessing to an attempt to pay a potential witness to remain silent in the country’s biggest-ever graft probe.

Temer’s office on Wednesday acknowledged he had met in March with the businessman, Chairman Joesley Batista of meat giant JBS SA, but denied any part in alleged efforts to keep jailed former House Speaker Eduardo Cunha from testifying.

O Globo’s report, which three sources familiar with the matter said was accurate, threatened to pull Temer into a corruption scandal that has already entangled several of his closest allies and advisors.

U.S.-listed shares of state-run Petrobras, Banco Bradesco, Vale SA, and Itau Unibanco also saw sharp drops in the premarket after O Globo reported the news.

Brazilian equities have surged over the past year, with the EWZ rising more than 45 percent in the period, as investors cheered Temer’s proposed economic policies. The fund is one of the 20 most actively-traded ETFs in the U.S. market on a daily basis, on average.

“Now the fear is that Temer might have to leave office like his predecessor, Dilma Rousseff,” said Komal Sri-Kumar, president of Sri-Kumar Global Strategies. “But it’s too early to panic because there are a lot of steps to removing a president in Brazil.”

Rousseff was removed Aug. 31 amid a massive corruption scandal and an economic crisis that crippled Latin America’s largest country.

Brazil had been an economic stalwart in the region just a few years before Rousseff’s impeachment, buoyed by surging oil prices. But the collapse in the crude market, coupled with a corruption scandal at Petrobras, led to millions of Brazilians flooding the streets in protest of Rousseff’s presidency.

—Reuters contributed to this report.

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