Brazilian gov't gets help from US Justice Department to seize $24M in crypto

Published at: Nov. 5, 2020

According to a Wednesday filing, the U.S. Justice Department seized $24 million in virtual currency pursuant to an official request from the Brazilian government.

The Department of Justice, or DoJ, said that the government of Brazil requested its assistance in connection to a crypto fraud scheme called “Operation Egypto.” Authorities in the South American nation reported that more than 10,000 Brazilians may have been defrauded from the scheme, in losses estimated at roughly $200 million.

The department seized funds connected to Brazilian national Marcos Antonio Fagundes, one of the individuals allegedly involved in the case. According to information that Brazilian authorities provided to the DoJ, Fagundes is charged with the operation of a financial institution without legal authorization, fraudulent management of a financial institution, misappropriation of funds, money laundering, and securities law violations. He and his conspirators allegedly operated an unregistered financial institution to hold crypto assets he obtained from victims by making “false and inconsistent promises” about the way the funds were invested and exaggerated the rates of return.

The funds were purportedly held on a U.S.-based crypto exchange. The DoJ said that a cryptocurrency firm holding the accounts complied with the seizure order, implying it was a company within its jurisdiction.

According to the Treaty on Mutual Legal Assistance in Criminal Matters between the United States and Brazil that has been in effect since 2001, either government can make a request regarding “proceeds or instrumentalities of offenses” subject to seizure located in the other’s territory. A Brazilian court issued an order calling for the seizure of any virtual currency Fagundes controlled or owned in the United States, which preceded the government filing an application to enforce the order in U.S. District Court for the District of Columbia.

The DoJ currently has the authority to confiscate cryptocurrency in connection with legal cases in the United States and later auction off the funds. In February, the government body announced that it would be selling roughly 4,040 Bitcoin (BTC), when the price was $9,200. Assuming the anonymous buyers purchased the funds at roughly market price, they could be looking at a 63% return with BTC’s rise to $15,000 today.

Tags
Regulation
United States
Law
Brazil
Department Of Justice
Related Posts
US Justice Dept announces launch of national crypto enforcement team
An official from the Office of the Attorney General has said the United States government is going to take a more active role in enforcement action against actors using cryptocurrencies for money laundering and other cybercrimes. Speaking at the Aspen Institute Cyber Summit on Wednesday, Deputy Attorney General Lisa Monaco said the Justice Department had launched the National Cryptocurrency Enforcement Team, an initiative aimed at going after platforms “that help criminals launder or hide their criminal proceeds.” Monaco cited her office’s work against Darknet-based Bitcoin (BTC) mixing service Helix in August but said the U.S. government should be doing more. …
Regulation / Oct. 6, 2021
Seven times that US regulators stepped into crypto in 2020
As digital assets made strides toward mainstream status in 2020, the guardians of the incumbent financial system have been working hard to minimize disruption caused by their integration. In the U.S., regulatory and law enforcement interventions throughout the year have left some projects out of business, empowered traditional players to take a closer look at crypto, and sent some unequivocal messages to cryptocurrency service providers globally. Naturally, the steady legitimization and expansion of the crypto space led regulators to get more involved than ever before. Below are the biggest cases of U.S. watchdog and law enforcement agencies’ involvement that have …
Regulation / Jan. 12, 2021
US attorney general releases guidelines for enforcing crypto laws
William Barr, the attorney general for the U.S., published official guidelines for keeping crypto markets accountable. The lead U.S. attorney's Cyber-Digital Task Force put together the guidelines, officially calling them: Cryptocurrency: An Enforcement Framework, according to an Oct. 8 statement from the U.S. Department of Justice. The statement explained: "The Framework provides a comprehensive overview of the emerging threats and enforcement challenges associated with the increasing prevalence and use of cryptocurrency; details the important relationships that the Department of Justice has built with regulatory and enforcement partners both within the United States government and around the world; and outlines the …
Regulation / Oct. 8, 2020
US federal judge approves of Justice Dept criminal complaint on using crypto to evade sanctions
The United States Department of Justice may move forward on a criminal prosecution case against a United States citizen who allegedly violated sanctions through cryptocurrency. According to a Friday opinion filing in U.S. District Court for the District of Columbia, the unnamed individual, who is the subject of a criminal investigation by the Justice Department allegedly sent more than $10 million in Bitcoin (BTC) from a U.S.-based crypto exchange to an exchange in a country for which the U.S. currently imposes sanctions — suggesting Russia, Cuba, North Korea, Syria or Iran. The filing alleged the individual “conspired to violate the …
Regulation / May 16, 2022
US authorities seize crypto website Bitzlato as part of international enforcement action
The United States Department of Justice is expected to announce a “major international cryptocurrency enforcement action.” According to a Jan. 18 announcement, U.S. Deputy Attorney General Lisa Monaco will lead a press conference in which the Justice Department will announce a major enforcement action — now believed to be against the crypto firm Bitzlato. The U.S. Treasury Department is also expected to announce a similar enforcement action. Other speakers at the event will include Assistant Attorney General Kenneth Polite of the Department of Justice's criminal division, U.S. Attorney Breon Peace of the Eastern District of New York, FBI Associate Deputy …
Regulation / Jan. 18, 2023