Brazil's civil police seized R$172 million (US$33 million) amid an investigation into money laundering carried out through crypto exchanges.
During an operation known as “Exchange” that took place in Sao Paulo and Diadema, Brazilian police carried out six search warrants, after which the Brazilian judiciary authorized freezing accounts and seizing assets from two individuals and 17 companies, according to an official statement that did not name them.
The investigation found that crypto exchanges acquired and sold bitcoin to fictitious companies fabricated to facilitate their creators' access to the banking system.
In a five-month period, one of the exchanges transacted $1.93 million in digital assets with six bogus companies, while eight other bogus companies acquired $2.9 million in cryptocurrencies in the same period, the police said.
The exchanges did not verify the legitimacy of the entities they dealt with or the transactions’ origin, the Brazilian police said, adding that the exchanges knowingly operated on behalf of a criminal organization dedicated to laundering money through cryptocurrencies.
According to the investigation, money was sent to offshore companies and subsequently repatriated by simulating sales or service provision transactions.
Preliminary investigations indicated that the companies conducted large transactions among themselves and then routed money to intermediaries, who were responsible for the acquisition of digital assets and the delivery of a hash code to their clients.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.