Brazil’s federal police and Brazilian tax authority launched the final phase of “Operation Colossus,” an operation that executed hundreds of court orders against cryptocurrency exchanges, arbitrage agents and fake companies in four states of the country. 158 government officers, including 130 federal police, participated in this operation, executing search and seizure orders for six cryptocurrency exchanges and four forex institutions.
Operation Colossus was launched to stop counterfeiting of cryptocurrencies
On September 22, the Federal Police of Brazil, with the help of the Brazilian Tax Authority, launched the last phase of Operation Colossus, an investigation that has a history of more than four years. The firms have served six cryptocurrency exchanges, four forex operators and more than 100 court orders on suspicion of aiding money laundering.
An estimated 130 federal police officers were involved in Operation Colossus, with two arrest warrants and 37 searches and arrests in four of the country’s states, including Rio de Janeiro, Bahia, Sao Paulo and Santa Catarina. 28 Brazilian tax authority officers also participated in the effort.
The criminals allegedly used cryptocurrency assets to transfer the money through remittances. According to a press release issued by the Federal Police, approximately $391 million in cash was transferred. The Federal Police said:
Such resources are imported and distributed through the official financial system, shell companies, without economic and financial capacity, and passed through transit accounts until they are converted into crypto-assets that can be used abroad.
Modus operandi and similar operations
Authorities believe three groups were involved in this attempted crime. The first group was formed by high-level arbitrage agents who bought large amounts of cryptocurrency assets in countries such as the US, Singapore and Hong Kong. The second group is the cryptocurrency exchange that acts as an intermediary.
The third group consists of fake companies and individuals who bought these cryptocurrency assets, and many of the customers were unable to buy the cryptocurrencies. These include the dead, people on assisted living programs and the elderly over 90 years of age. More than 1,300 of these bogus companies were run by a single accountant.
It’s one of the largest crypto-related operations in the country, with operations such as Cryptos and Operation Compliance carried out by government forces last year.
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