Brazil dismantles networks that used crypto to launder illegally extracted gold

Brazilian Federal Police started an operation last week against a criminal gang that used cryptocurrencies to launder money from illegally extracted gold, and caused potentially irreversible environmental damage to the northern region of the country where the extraction site was located.

Criminal gangs used homemade cryptocurrencies to launder poorly received gold coins. (Photo: PxHere, License)The operation, called ‘Greed’, was linked to healthcare companies located in Porto Velho, the capital of the northern state of Rondonia. Following a complaint, Brazilian police launched an investigation in February 2021 and found that illegal funds obtained from illegal mining were injected into these companies over the past decade.

A bank analysis conducted by the federal police found that between 2019 and 2021, over 16 billion reais ($ 3 billion) moved through the criminal group’s bank accounts.

The companies moved around the billions using several methods, including setting up shell companies and taking out stacks of cash; but the police emphasized the use of cryptocurrencies to launder cash in an unsuspecting manner.

One of the companies operating within the criminal organization created its own cryptocurrency to justify the increasing values ​​of the criminal companies from illegally extracted gold, “as if they were investments from third parties interested in receiving dividends,” the federal police said.

One of the biggest criticisms of cryptocurrencies is their use for illegal activities due to the lack of government regulation – as is the case when criminals launder their bad money.

Last year alone, Brazilian police seized around $ 33 million in a money laundering scheme facilitated by crypto exchanges, prompting Brazil’s special committee of the Chamber of Deputies to approve a bill aimed at cracking down on cryptocurrency crimes, with a special focus on individuals or groups using them. digital tokens to launder money, reported Be In Crypto.

The federal police also found that the criminal network used invalid environmental licenses to launder gold obtained from other mines in the northern region of the country via a mining company they had.

The environmental impact of the company’s activity in only one of these garimpo, the mining site this gold is sourced from, was estimated to have cumulatively damaged an area the size of over 200 football pitches.

This company, whose environmental damage cost the region 300 million reais ($ 55.3 million), had an estimated revenue of 1.1 billion reais ($ 203,000).

During the operation, federal police arrested five people and executed 60 search and seizure orders.