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Brazil has launched Operation Exchange, an investigation into local cryptocurrency exchanges that assisted criminals in money laundering.
In an anti-money laundering operation, Brazilian police seized 172 million Brazilian reals ($33 million USD).
The fraud probe, termed “Operation Exchange,” covered six search warrants in Sao Paulo’s Diadema municipality and the capital city itself, according to a July 22 police statement.
The investigation is still in progress but the police allege that a number of cryptocurrency exchanges helped gangs launder money.
The police discovered 17 bogus companies set up by criminals to launder money via cryptocurrency exchanges. Following the washing of their money, the criminals intended to transfer the funds to offshore accounts.
According to the police, one crypto exchange laundered $1.93 million from six fictitious companies over a five-month period, and eight other companies received $2.9 million in cryptocurrency.
According to the police, the crypto exchanges had not verified the origin of these funds or the legitimacy of the companies.
The courts seized assets from these companies as well as two individuals involved in the investigation.
Earlier this month, Brazilian police concluded “Operation Daemon,” an investigation into an alleged embezzlement of at least 1.5 billion Brazilian reals (approximately $300 million) that claimed the lives of 7,000 people.
Cláudio Oliveira, also known as “The Bitcoin King” in the country, was arrested. He was the CEO of Bitcoin Banco Group, a custodian firm that promised extraordinary profits to anyone who trusted the company with their funds. However, the company claimed to have lost 7,000 Bitcoins by the end of 2019. According to the police, this was all part of the plan.
It took three years for Brazilian police to complete Operation Daemon. However, Operation Exchange has only recently begun.