Brazilian authorities have made a significant breakthrough in the fight against financial crimes with the uncovering of a $9.7 billion crypto laundering scheme. The operation, dubbed “Operation Niflheim,” led to the arrest of suspects in multiple cities, including São Paulo, Fortaleza, and Brasília.

According to reports, the Federal Revenue and Federal Police executed 23 search and eight arrest warrants as part of the investigation into the elaborate money laundering scheme. The suspects were allegedly involved in using cryptocurrencies to launder funds obtained from criminal activities such as drug trafficking and smuggling.

The investigation focused on two companies in Caxias do Sul, which were found to have moved a staggering amount of money – R$ 19 billion (approximately $3.6 billion) and R$ 15 billion ($2.8 billion) between August 2019 and May. The scheme involved multiple layers, including tax evaders, shell companies, and firms facilitating foreign exchange and crypto transactions. The laundered funds were then transferred abroad to countries like the U.S., Hong Kong, and the UAE.

Authorities discovered that a significant portion of the deposits linked to the main suspects came from individuals with criminal backgrounds, highlighting the widespread use of cryptocurrencies to facilitate illicit activities. As a result of the investigation, a federal court froze $1.58 billion in funds held in bank accounts and cryptocurrency exchanges.

The Federal Police reported that over $9.7 billion had been laundered since the investigation began in 2021, underscoring the significant role that cryptocurrencies play in facilitating financial crimes in Brazil. This revelation comes at a time when regulators are increasingly focusing on the regulation of cryptocurrencies to prevent such illicit activities.

The news of the busting of the $9.7 billion crypto laundering scheme has sent shockwaves through the financial and crypto communities in Brazil. It serves as a stark reminder of the importance of robust regulatory measures to combat money laundering and other financial crimes in the digital age. Authorities are expected to continue their crackdown on such activities to safeguard the integrity of the financial system and protect investors from falling victim to fraudulent schemes.