Brazil seizes R$2.7B (~$500M) in Operation Kryptolaundry; $128M frozen, multiple arrests

Brazil’s Federal Police launched Operation Kryptolaundry, dismantling a crypto-focused money‑laundering network active since 2021 and seizing roughly R$2.7 billion (~$500 million) in assets. Courts ordered the freezing of about R$685 million (~$128 million) in bank accounts and authorized seizure of farms, commercial properties and luxury real estate. Authorities executed 24 search‑and‑seizure warrants and nine preventive arrest warrants targeting 45 individuals and companies; six arrests were made in the Federal District and two suspects were detained in Spain. Investigators identified R$404 million (~$75.5 million) as illicit proceeds laundered via shell companies, social‑media investment promotions, in‑person meetups and crypto transfers — methods similar to those used by the convicted “Bitcoin Pharaoh.” Separately, an earlier probe named Deep Hunt dismantled a cybercrime ring that laundered about R$164 million (~$32 million) using cloned cards, fake devices and dark‑web services; that operation led to 32 arrests and around R$112 million (~$21 million) seized with assistance from TRM Labs and Binance’s investigation team. Key takeaways for traders: heightened AML enforcement in Brazil increases regulatory scrutiny on exchanges, brokers and OTC/P2P desks. Large asset freezes and arrests can spur short‑term on‑chain volatility, localized liquidity tightness and accelerated KYC/AML checks by platforms. Traders should expect potential downward pressure on locally traded volumes and temporary spikes in volatility for cryptocurrencies involved in peer‑to‑peer flows; maintain stricter counterparty due diligence and monitor compliance notices and on‑chain movements tied to seized wallets.