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.
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.