The Brazilian Federal Police and the Brazilian tax authority have launched the final stage of “Operation Colossus,” a movement that has executed hundreds of court orders against cryptocurrency exchanges, arbitrage agents, and fake companies in four states of the country. This operation saw the involvement of 158 government officers including 130 federal policemen. The search and seize orders were issued for six crypto exchanges and four foreign institutions.
Operation Colossus is Launched To Stop Crypto Money Laundering
With the support of Brazil’s tax authorities, the Federal Police of Brazil launched Operation Colossus on September 22. This was a four-year-old investigation. More than 100 court warrants were issued against six cryptocurrency exchanges, four forex brokers, and arbitrage professionals suspected of aiding money laundering.
Operation Colossus saw 130 federal police officers involved in delivering 2 arrest warrants as well 37 search and seize orders to 4 states in Brazil, which included Rio de Janeiro and Bahia and Sao Paolo. The effort also included 28 tax officers from Brazil.
According to the Federal Police, criminals used crypto assets as a way of laundering money through a remittance network. Federal Police stated that suspicious transactions resulted in the movement of close to $391 Million. According to the Federal Police:
These funds entered the system and were transferred through shell companies to become cryptoassets.
Modus Operandi and Similar Operations
The authorities believe three different groups were responsible for this crime. First, there is a high-ranking group of arbitrage agents who purchased huge amounts of cryptocurrency assets from countries such as the U.S. and Singapore. Second is the cryptocurrency exchanges that acted as intermediaries.
This third group consists of individuals and fake businesses that bought these crypto assets. Many customers were unable to buy cryptocurrencies. These included the elderly, those who are eligible for assistance, the disabled, and people aged over 90. One accountant managed more than 1,300 fake businesses.
It is the largest crypto-related operation in country. This operation joins others such as operation Compliance and Kryptos, both of which were carried out by the government last year.
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