Brazilian Police Raid Six Crypto Exchanges in International Money Laundering Ring Bust

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 26, 2023

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Police and tax officers in Brazil have launched a major operation that has seen them raid six domestic crypto exchanges. They believe the platforms may be implicated in a massive international crime and money laundering ring.

In a joint announcement, the Special Department of Federal Revenue of Brazil (known locally as the Receita Federal, or the federal revenue service agency) and the Federal Police Force, stated that the raids took place as part of what they are calling “Operation Colossus.”

Officers explained that they believe some $380 million worth of dirty money has been laundered through domestic crypto trading platforms – and that a single “criminal organization” is behind this.

They wrote:

“The operation will combat a criminal organization dedicated to money laundering that has used an intricate system of remittances. [The organization] has sent illicit resources abroad via the purchase and sale of cryptoassets.”

The agencies stated that the organization had made use of a network of “shell companies” and “passed funds through transit accounts” – before purchasing “cryptoassets.”

They claimed that the money comprised “embezzled funds, drug trafficking profits, laundered money,” and the revenues of various “crimes against the national financial system.”

A total of 158 officers were dispatches to addresses in São Paulo, Rio de Janeiro, Bahia, and Santa Catarina.

Crypto Exchanges Raided

The media outlet Metropoles reported that the Criminal Court of São Paulo had issued 101 court orders pertaining to the case, as well as “two arrest warrants,” and 37 search-and-seize warrants.

Twenty two of these were issued to individuals and 15 to companies.

Six of these search warrants were issued to crypto exchanges, although the identity of the trading platforms has not been revealed. A further four financial institutions that have Central Bank-issued licences for operating in the foreign exchange market have also been searched, as well as three accountancy firms.

The media outlet added that the ring’s operators were allegedly “responsible for purchasing large amounts of cryptoassets abroad, in countries such as the United States, Singapore, and Hong Kong” and then selling these tokens on the Brazilian black market.

The agencies added that they believed the crime ring may have been active for up to four years prior to the launch of Operation Colossus.

The development comes as talk about crypto regulation begins to intensify in Brazil – with regulators now vying for more control over the sector.