Brazilian police raid six crypto exchanges in international money laundering ring

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

In a joint announcement, the Special Department of Federal Revenue in Brazil (known locally as Receita Federal, or the Federal Tax Service Agency) and the Federal Police Force stated that the raids took place as part of what they call “Operation Colossus.”

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

They wrote:

“The operation will combat a criminal organization dedicated to money laundering that has used an intricate system of money transfers. [The organization] has sent illegal resources abroad via the purchase and sale of crypto-assets.”

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

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

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

Crypto exchange raided

Media outlet Metropoles reported that the criminal court in São Paulo had issued 101 court orders related to the case, as well as “two arrest warrants” and 37 search warrants.

22 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 disclosed. A further four financial institutions that have central bank-issued licenses to operate in the foreign exchange market have also been applied for, as well as three accounting agencies.

The media added that the ring’s operators were allegedly “responsible for buying large amounts of crypto-assets 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 before the launch of Operation Colossus.

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