Brazilian authorities have requested court orders to halt the cryptocurrency assets of individuals believed to be involved in electronic trading scams as part of a large-scale operation.
Local Brazilian news source, Livecoins, revealed that the police were involved in a mission named “Spin-Off.”
This mission collaborates with the Federal Police and the Receita Federal (Brazil’s Federal Revenue Special Department).
Raids were conducted on properties across the states of São Paulo, Mato Grosso, and Mato Grosso do Sul.
In a coordinated effort, 180 federal police officers along with 74 tax auditors conducted raids as they were granted 50 “search and seize” warrants in cities such as Cuiabá, Várzea Grande, Sinop, Alta Floresta, Rondonópolis, Ribeirão Preto, and Ponta Porã.
A division of the Federal Criminal Court provided the investigators with orders to freeze specific cryptocurrency wallets.
This suggests that the implicated wallets may be linked to domestic cryptocurrency exchange platforms.
However, authorities remained tight-lipped about which platforms were approached for cooperation. Further details regarding the value or the specific cryptocurrencies targeted for freezing were also not shared by the officers.
The police announced that the primary aim of their operation was to break up what they described as a “criminal organization.” Investigators believe this group orchestrated a sophisticated financial scheme.
According to the officers, the organization procured electronic items from international sellers and then sold them to local buyers within the country.
Additionally, there’s suspicion that the organization channeled significant sums of money and/or cryptocurrency, sourced from these electronic sales, into accounts of shell companies.
Police theorize that these entities acted as “fronts,” having been registered under the names of intermediaries. They suspect that the purpose of these companies was to mislead investigators by concealing the true nature and intent of the funds or cryptocurrency they were routing to foreign suppliers.
Brazilian Police Freeze ‘Criminals’ Crypto’
Authorities believe the group has traded goods valued at approximately $24.3 million using this method, without reporting their activities to customs, tax agencies, or law enforcement.
Search warrants have also been directed at locations connected to traders and vendors who might have been complicit in the operation.
Legal officials are considering pressing charges against the alleged culprits for offenses such as misappropriation, tax evasion, and money laundering.
Should they be convicted, these individuals might face prison sentences that extend up to 20 years.
In a related incident last month, authorities carried out raids on various locations associated with Braiscompany, a prominent entity suspected of running a crypto pyramid scheme.
Furthermore, in July, law enforcement reported having shut down two distinct cryptocurrency-based money laundering rings.