Brazil’s Federal Police Dismantle $540 Million Crypto Laundering Network in “Operation Lusocoin”

Late last month, Brazil’s Federal Police launched Operation Lusocoin, a sweeping investigation into a sophisticated criminal network accused of laundering billions of reais through cryptocurrency. The operation — coordinated by the Superintendence of the Federal Police in Rio Grande do Sul — executed 13 search and seizure warrants, 11 temporary arrests, and issued court-ordered freezes on assets totaling more than 3 billion Brazilian reais (≈ USD 540 million).

According to investigators, the network operated as an international money-laundering and foreign-exchange evasion scheme, converting illicit profits from drug trafficking, smuggling, tax evasion, and even terrorism financing into crypto assets to obscure the source of funds. The structure had its leadership based in Dubai, with laundering operations spread across several Brazilian cities — including Pelotas, Dourados, and Florianópolis — and extensive use of “crypto brokers” and “layered intermediaries” to move value across borders.

The investigation was led by Brazil’s Federal Police unit in Santana do Livramento, a frontier city that shares a porous border with Rivera, Uruguay. The region is a hub for commerce and informal exchange—a place where cash, goods, and people move fluidly across national lines. Those same dynamics that fuel cross-border trade also make it fertile ground for financial crime. Trade-based laundering, bulk cash smuggling, and the use of shell companies to conceal illicit proceeds are all common tactics. As criminals increasingly turn to cryptocurrencies to move value across borders, the unit’s embrace of advanced blockchain analytics marks a pivotal evolution—bringing new visibility to hidden flows and reinforcing financial integrity in one of Brazil’s most challenging investigative environments.

The group is believed to have moved more than 50 billion reais (≈ USD 9 billion) through its ecosystem of shell companies, exchanges, and digital wallets. Federal Police traced the network’s activity to the creation of a proprietary token — “Lusocoin” — which was used to lure investors while simultaneously functioning as a laundering vehicle for criminal proceeds.

Authorities seized six luxury vehicles, six high-value properties, and froze assets across 65 individuals and corporate entities, in addition to approximately 30 cryptocurrency wallets tied to the suspects. In partnership with international exchanges and blockchain analytics providers, investigators were able to identify and freeze 4.33 million USDT (≈ 22.5 million reais) linked to the operation’s principals.

The case highlights Brazil’s growing sophistication in cryptocurrency investigations and its collaboration with the T3 Financial Crime Unit framework — a global public-private partnership that brings together TRM Labs, Tether, TRON, and law enforcement agencies worldwide to trace, freeze, and recover illicit digital assets. 

Operation Lusocoin marks the sixth investigation in which Brazilian authorities have leveraged T3. Through T3, agencies gain access to advanced blockchain analytics technology, specialized training, and a trusted international network focused on disrupting illicit finance. Across these coordinated operations, Brazilian authorities have now frozen 13,399,699 USDT—more than USD 13 million in criminal assets—demonstrating the country’s accelerating capacity to dismantle complex, cross-border money-laundering networks.

The case underscores Brazil’s growing sophistication in cryptocurrency investigations and its deepening investment in digital forensics. TRM Labs, recently selected by Brazil’s National Public Security Secretariat (SENASP) within the Ministry of Justice and Public Security, now provides advanced blockchain analytics tools to federal and state-level units. This partnership represents a milestone in Brazil’s broader strategy to enhance financial transparency, trace illicit digital asset flows, and build lasting investigative capacity at the front lines of global financial crime.

Operation Lusocoin demonstrates once again that even highly decentralized, cross-border crypto laundering schemes leave trails — and that with blockchain intelligence, collaboration, and rapid coordination across jurisdictions, those trails lead to enforcement success.