Funds to the tune of US$ 33 Million have been seized from the possession of the alleged criminals who, according to the authorities, were involved in money laundering. Brazilian Police initiated raids under the operation called “Exchange Transaction” and arrested a total of 6 individuals involved in money laundering and seized this huge amount from their possession. The investigation was conducted for identifying the fake and bogus companies intended for the purposes of laundering money through crypto exchanges.
This is why the regulators of the world have been reminding crypto exchanges time and again to ensure strict adherence to the KYC policy. When there is a breach of KYC policy, then the breach results definitely in the activities of money laundering. On the other hand, money laundering has been regarded as a global crime that has to be prevented at all costs. Each state is responsible for ensuring compliance with AML policy under international law and practice.
Authorities in Brazil were enquiring about an issue involving fake and false companies. The authorities were of the view that behind these companies, the criminals were taking shelter against their money laundering activities. The authorities alleged that the money launders were using these fake companies for opening multiple trade accounts with crypto trading firms. It was decided to first identify which companies are genuine and which companies are false and bogus. The identification process was named by the authorities as to the “Exchange Transaction” i.e. an operation involving crypto exchanges as well.
As the investigation proceeded, the authorities sought assistance from the Court and required the court to issue search and seizure warrants. It was informed that the Court had issued at least six warrants to the authorities authorizing them to raid certain premises. The warrants were issued against alleged bogus companies which were purportedly based in the areas of Diadema and Brazil’s capital.
During the search and seizure operations, the authorities have arrested six individuals on the allegations of their involvement in money laundering activities. False and bogus accounts involving two persons and 17 corporations were also found at crypto exchanges. The authorities immediately blocked these accounts for further investigation.
The investigating officers revealed that these companies were involved in executing transactions worth exorbitant funds. Most of the transactions are in between the accounts held by these fake companies, claimed investigation officers. It was pointed out that after conducting several in-between transactions, the money was then converted into virtual assets through crypto exchanges. Because these crypto firms were not fully implementing the AML and KYC policies, therefore, exchanges became safe-haven for money launderers.
Brazilian Police have in the meantime broaden their scope of the investigation to include several crypto exchanges into the probe. Police noticed that there was a lack of responsibility on the part of crypto exchanges as well.