Sao Paulo, Brazil Police Seize $33M In Alleged Crypto Fraud Scheme
Brazilian police have seized $33 million reportedly from a money laundering scheme involving cryptocurrencies, according to a press release from police in São Paulo.
The court order for the investigation came out of the
performance of brokerages that had been intermediating the purchase and sale of
crypto for companies deemed either fake or not reputable, the release stated.
The objective had been to trade large amounts among themselves and then send
those amounts to brokers.
From there, the companies acquired digital assets which
could be used globally with no ability to be traced, according to the release.
The police also found that one of the brokerages in question
has relations almost exclusively with shell companies, the release stated. In
five months, the broker traded around 10 million Brazilian real (about $1.9
million) in virtual currencies, with around six fake companies and possibly
several others.
In other news, U.S. authorities are opening a new part of a
regulatory crackdown on cryptocurrency as they home in on BlockFi, the
Financial Times (FT) reported.
BlockFi has raised $14.7 billion via offering
interest-bearing crypto accounts, according to FT. But officials in several
states, including Alabama, New Jersey and Texas, have said these accounts were
basically just an unregistered securities offering.
BlockFi has countered that its interest-bearing account is
“not a security,” FT reported. The company said it believes its actions have
been “lawful and appropriate.” It said it wants to give consumers a way to earn
interest on their crypto assets.
The BlockFi opposition has been interesting because it
involved states on both sides of the current political divide. While New Jersey
is a Democratic state, Alabama and Texas are both Republican, which Alexis
Goldstein, director of Financial Policy at the Open Markets Institute in
Washington said indicates a real concern from both sides about investor
protection, per FT.
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