$33M Seized Amid Brazilian Crypto Money Laundering Investigation

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In Brief
  • Brazilian authorities' investigation included six search warrants conducted across São Paulo.

  • Two individuals and 17 companies had their accounts frozen and $33M worth of assets seized by court order.

  • The Accused created fictitious companies to acquire bitcoin, before sending funds to offshore companies to repatriate in the future.

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A probe into a suspected money laundering operation has resulted in 172 million Brazilian real (R$) (equating to $33 million USD) being confiscated by civil police.

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According to an official statement, Brazilian authorities carried out a total of six search warrants on July 22. They conducted probes in Diadema and São Paulo. Following these, the courts authorized the police to seize the assets of two individuals, plus a total of 17 companies. The Brazilian court since ordered the two accused’s accounts blocked.

Investigations have since shown that the accused created a number of fictitious companies to gain access to the banking system. Crypto exchanges sold large amounts of bitcoin (BTC) to these companies. More specifically, in the space of five months, one exchange traded R$10 million (approximately $1.92 million) worth of BTC to six of these fake companies. Meanwhile, a further eight fictitious companies gained another R$15 million (approximately $2.88 million) worth of BTC in the same period.

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The investigation concluded that the accused sent the money to companies situated abroad. These offshore firms then repatriated the funds in the forms of sales and services. 

According to the police’s statement, the exchanges did not carry out verification measures as to the legitimacy of their clients. Nor did they look into the origins of their clients’ transactions. Furthermore, the statement alluded to these exchanges’ almost exclusive ties with criminal organizations, shell companies, and the black market.

Brazilian stock exchange embraces Ether

Brazil has also been the site of recent, more legitimate crypto deals. Namely, most recently, an Ethereum exchange-traded fund (ETF), which got the go-ahead to list on the B3, the country’s second-oldest stock exchange. According to reports, this development makes the B3 the first exchange in Latin America to have a 100% ETH ETF. Reports also indicate that the Winklevoss brothers’ exchange Gemini will provide custodial services for the fund.

QR Capital, a crypto investment company based in Rio de Janeiro, will list the fund under the ticker QETH11. Brazil’s securities regulator, the Comissão de Valores Mobiliários (CVM), previously green lit an ETF for BTC back in March. This was the first such ETF listed in South America, according to reports.

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Dale Hurst is a journalist, presenter, and novelist. Before joining the Be In Crypto team, he was an editor and senior journalist at a news, lifestyle and human-interest magazine in the UK. Cryptocurrency was one of the first subjects he specialized in when first going freelance in 2018, reviewing exchanges and analysing lawsuits.

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