🛁 Brazil 🇧🇷: how digital assets facilitate the infiltration of organized crime into the formal economy

🛁 Brazil 🇧🇷: how digital assets facilitate the infiltration of organized crime into the formal economy

The financial sector is seeking stricter rules against shell companies and similar mechanisms, phenomena collectively described as the “outsourcing of crime.”

➡️ Background: on May 28, São Paulo police carried out a large-scale operation against a criminal group suspected of operating illegal gambling platforms and laundering money through shell companies and nominees.

➡️ The operation, dubbed “Fake Las Vegas,” was a continuation of Operation False Mercury, an ongoing investigation into financial crimes. The probe resulted in court-ordered freezes of assets and accounts totaling approximately USD 1.198 billion, linked to individuals suspected of having connections with the criminal organization First Capital Command (PCC).

➡️ According to investigators, the group operated the underground platform “Black Vegas,” hosted overseas and used to offer games such as “Jogo do Tigrinho” and “Jogo do Bicho,” both prohibited under Brazilian law. Payments were processed through the instant payment system Pix and routed via intermediary companies in an effort to obscure financial flows and hinder regulatory scrutiny.

➡️ Industry overview: Broader fraud statistics for 2025 illustrate the growing scale of financial crime in Brazil:

➡️ Banking fraud involving checking and savings accounts: USD 7.592 billion. The most common methods included malware attacks, mobile device theft, and credential hijacking.

➡️ Pix-related fraud: USD 5.754 billion. Since the launch of Pix in 2020, losses associated with criminal activity involving the system have reportedly increased by 43%.

➡️ Credit card fraud: USD 4.555 billion.

➡️ Online shopping scams involving non-delivery of purchased goods: USD 2.677 billion.

➡️ Investment fraud promoted through online advertising and deceptive financial schemes: USD 1.778 billion.

➡️ Despite ongoing efforts by regulators and financial institutions, recovery rates for stolen funds remain low, frequently below 10%, while fraudsters continue to adapt and evolve their methods at a rapid pace.

➡️ Annual spending by banks on cybersecurity and corporate security measures has already reached approximately USD 999 million, yet industry experts argue that these investments remain insufficient to fully contain the growing threat.

➡️ Countermeasures:

➡️ The blocking of CPF numbers (Brazilian taxpayer identification numbers) associated with fraudulent accounts across the financial system has reportedly delivered positive results in reducing repeat offenses.

➡️ If an account is found to have been used for Pix-related fraud, the financial institution is required to terminate its relationship with the client.

➡️ In addition, representatives of the formal financial sector are advocating for a minimum five-year exclusion period for individuals who knowingly cooperate with fraudsters or participate in criminal schemes, aiming to strengthen deterrence and reduce opportunities for repeat offenders to re-enter the financial system.

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