Brazilian Civil Police Seize $33 Million From Alleged Crypto Money Laundering Scheme

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by Tyler Durden
Monday, Jul 26, 2021 - 05:45 AM

In an event that crypto firms worldwide will likely pay close attention to, Brazilian police have foiled a $33 million crypto scheme after an investigation into money laundering.

The investigation took place in Sao Paulo and Diadema, where police executed six search warrants that resulted in "the Brazilian judiciary authoriz[ing] freezing accounts and seizing assets from two individuals and 17 companies," according to Yahoo Finance

"Crypto exchanges acquired and sold bitcoin to fictitious companies fabricated to facilitate their creators’ access to the banking system," the investigation discovered. Over the course of five months, it was revealed that one exchange transacted $1.93 million in crypto with six different fake companies. Eight other fake companies transacted another $2.9 million in crypto, the investigation found. 

Exchanges made no effort to verify the legitimacy of the companies or the transactions, according to police, who alleged that "the exchanges knowingly operated on behalf of a criminal organization dedicated to laundering money through cryptocurrencies".

Funds were additionally sent to offshore companies and then repatriated via simulated sales or similar transactions. 

The companies also conducted "large transactions" among themselves, the report noted, before routing money to intermediaries who facilitated the acquisition of digital assets and delivered hash code to clients.

The bust comes as scrutiny on "know your client" and anti-money laundering laws for crypto exchanges has increased significantly in the United States.