Brazilian authorities have reportedly launched a major crackdown on a multi-billion-dollar cryptocurrency-based money laundering operation spanning several cities, including São Paulo, Fortaleza, and Brasília. The operation, which has laundered billions of dollars, is at the centre of “Operation Niflheim,” an effort led by the Federal Revenue Service and Federal Police.
According to a report published by blockchain forensics firm TRM Labs on September 20, the investigation focuses on two companies based in Caxias do Sul. These companies allegedly facilitated the movement of approximately R$ 19 billion (around $3.6 billion) and R$ 15 billion (about $2.8 billion) between August 2019 and May 2024. The funds are suspected to be linked to a wide range of illegal activities, including drug trafficking and smuggling.
TRM Labs reports that the money laundering scheme involved a complex, four-layered structure that included tax evaders, shell companies, and firms specializing in foreign exchange and cryptocurrency transactions. Laundered funds were routed internationally to locations such as the United States, Hong Kong, and the United Arab Emirates.
Notably, a significant portion of the deposits linked to the operation came from individuals with criminal records. The authorities have reportedly carried out 23 search warrants and eight arrests.
Related: Crypto Kingpin “Hu Shi” Arrested in Japan Over Alleged Global Fraud Network
Increasing use of digital assets in money laundering
Indian authorities recently launched an investigation of the crypto trading app “Datameer” for allegedly defrauding over 700 people of INR 10 million (around $119,000). The app, which launched in April 2024, operated for five months and lured victims with promises of high returns because their funds were allegedly being invested in cryptocurrencies.
Meanwhile, in a separate case, Indian authorities arrested four individuals linked to a fraudulent cryptocurrency platform that defrauded victims of over $90,000. The suspects impersonated representatives of a fake trading company, GBE Crypto Trading, likely mimicking the well-known GBE Brokers. They promoted their scam through WhatsApp and Telegram, using virtual phone numbers and VPNs to conceal their identities.
Brazil Is Tightening Crypto Oversight
Brazil’s central bank has been taking a larger role in supervising virtual-asset service providers following legislation that established a framework for regulating the sector.
In 2025, the central bank published rules covering the authorization and supervision of virtual-asset service providers, bringing crypto businesses further into Brazil’s regulated financial system. The rules are designed to strengthen requirements around governance, security, consumer protection and anti-money-laundering controls.
In August 2026, the central bank announced new anti-fraud rules requiring certain cryptocurrency transfers to be delayed by as much as 24 hours. The measure is meant to give financial institutions and crypto-related service providers more time to identify potentially fraudulent transactions and prevent funds from leaving the system.
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