In a massive financial crime investigation, Brazilian authorities found a $9.7 billion cryptocurrency laundering network and arrested several people.
Authorities in Brazil have taken decisive action against a cryptocurrency-based, multi-billion dollar money laundering network operating in several cities, including São Paulo, Fortaleza, and BrasÃlia.
Blockchain forensic company TRM Labs revealed in a blog post on September 20 that the Federal Revenue and Federal Police executed 23 search and eight arrest warrants as part of the alleged “Operation Niflheim,” which targeted a network suspected of using cryptocurrency to launder funds from illegal activities like drug trafficking and smuggling.
The focus of the inquiry is two Caxias do Sul-based businesses that are suspected of moving R$ 15 billion ($2.8 billion) and R$ 19 billion (about $3.6 billion) between August 2019 and May.Â
The scheme had four layers: tax evaders, shell corporations, and companies that handled cryptocurrency and foreign exchange transactions.
Once overseas, the money was laundered and sent to the United States, Hong Kong, and the United Arab Emirates. TRM Labs:
Authorities discovered that over half of the deposits linked to the main suspects came from individuals with criminal backgrounds, pointing to widespread use of cryptocurrencies to facilitate illicit activities.”
A federal court froze $1.58 billion in funds held in bank accounts and cryptocurrency exchanges, though the report did not specify which platforms were involved.
Over $9.7 billion has reportedly been laundered since the investigation started in 2021, according to the Federal Police, highlighting the substantial role cryptocurrencies play in enabling financial crimes in Brazil.
