Brazil froze $2B in assets tied to a crypto-linked laundering network after U.S. sanctions. The probe targeted shell companies and exchange accounts moving drug trafficking proceeds.
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Brazilian authorities froze roughly 1.04 billion reais ($2 billion) in assets, bank accounts, and cryptocurrencies as part of a probe into an alleged money laundering network that moved illicit proceeds through digital assets and traditional finance.
The operation, which the Federal Police named "Operation Midas," targeted a group suspected of using crypto exchanges and shell companies to wash funds tied to drug trafficking and corruption, officials said. The freeze covers real estate, luxury vehicles, and crypto holdings across multiple wallets.
Investigators traced a pattern of small-dollar crypto purchases layered through Brazilian and offshore exchanges, then converted back to reais through real estate deals, according to court documents. The network allegedly moved money through at least 12 shell companies registered in São Paulo and Rio de Janeiro.
The U.S. Treasury's Office of Foreign Assets Control (OFAC) had previously sanctioned several individuals tied to the same network, the Federal Police said. The Brazilian action followed a joint investigation with U.S. authorities that began in late 2023.
Brazil's Central Bank and the Securities and Exchange Commission (CVM) assisted in tracking the crypto flows. The CVM has been tightening oversight of digital asset brokers, requiring registration and anti-money laundering controls since 2023.
Authorities arrested four suspects and are seeking extradition of two others believed to be outside Brazil. The investigation remains open, with additional asset freezes possible as analysts review transaction records from 14 exchange accounts.
The case highlights how Brazilian regulators are using U.S. sanctions designations as triggers for domestic asset seizures, a tactic that has grown more common since Brazil's anti-money laundering law was updated in 2022 to allow freezing without a criminal conviction.
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