Brazilian police arrest heads of cryptocurrency laundering scheme used by drug cartel

Plainclothes police in Sao Paulo, Brazil, raided a money laundering operation using cryptocurrencies by the drug gang Primeiro Comando da Capital.

According to CNN, the PCC gang operated a cryptocurrency exchange that facilitated money laundering activities totaling more than $88.6 million (approximately 500 million Brazilian reais).

The company was registered under the name of a 23-year-old woman, whose name was not disclosed but who was reported to be the daughter of a Mogi das Cruzes municipal council candidate.

A check worth 55 million reais was also seized during the raid at the company’s headquarters.

The report also stated that money laundered using cryptocurrencies would be used to finance organized crime during the 2024 local elections.

Authorities have so far arrested 13 people in connection with the scheme.

Cryptocurrencies have long been used as a tool by criminals and gangs in Brazil. Earlier this year, Brazilian federal police dismantled a $2.6 billion crypto-backed money laundering operation.

In June 2023, Brazil’s Federal Revenue Special Agency raided six local cryptocurrency exchanges that were allegedly laundering $380 million worth of money.

Later that year, a UK-based individual was investigated for using cryptocurrencies to launder drug money through cryptocurrency exchange Binance. The funds were reportedly linked to Sérgio Roberto de Carvalho, one of Interpol’s most wanted suspects and often referred to as the “Brazilian Pablo Escobar.”

This trend has also been observed beyond Brazil among various criminal organizations in Latin America, including notorious cartels such as the Mexico-based Sinaloa Cartel and Central America-based MS-13, according to the 2023 report.

The increasing use of cryptocurrencies in illicit activities has not slowed adoption in Brazil, which saw a 30% increase in cryptocurrency trading volume in 2024. The country’s central bank is also expected to introduce digital asset regulations this year.

Brazil’s largest bank, Itaú Unibanco, responded to the demand and allowed Bitcoin and Ethereum trading on its mobile app on June 12. Meanwhile, in March, asset manager BlackRock launched a spot Bitcoin ETF product in the country.