Bitcoin Used by Brazilian Officials in $22M Laundering SchemeMar 15, 2018 at 22:53
Several Brazilian government officials resorted to Bitcoin to siphon off state funds in a money-laundering scheme amounting to $22.4 million.
Though the criminal activity had been going on since 2001, it was the first time that cryptocurrency had been used to facilitate it.
Luiz Henrique Casemiro, the Superintendent of Rio de Janeiro’s Internal Revenue Service, said the growing use of Bitcoin in remittances drew their attention to use it in illegal operations.
The monies were derived from budget allocated for the purchase of food for state-run prisons. The perpetrators had misstated the amount and then channeled the excess funding into other discreet avenues.
The Brazilian police had searched 28 sites and held seven people, to date. Among the most high-profile arrests are former chief of police Marcelo Matins and Cesar Rubens Monteiro Carvalho, the former state prison system head.
The impact on how the Brazilian government regards Bitcoin and other cryptocurrency still need to be measured.
The central bank has been critical of cryptocurrencies since they first started springing up in the country. Brazilian president Ilian Goldfajn compared it to a pyramid scheme in October 2017.
Just a week ago, Brazil’s Securities and Exchange Commission had blocked the offer of securities launched by HashBrasil, a local Bitcoin mining company.