Angelika Hellweger, of financial crime specialists Rahman Ravelli, assesses the situation.

Brazilian police raided six crypto exchanges as part of a major operation to combat criminal organisations' use of cryptoassets.

The operation, named "Operation Colossus", was conducted in an attempt to tackle the laundering of an estimated $380 million through Brazilian crypto trading companies. The laundered money has allegedly come from drug trafficking, embezzled funds and income from crimes against the national financial system in areas including São Paulo, Rio de Janeiro, Bahia and Santa Catarina.

These latest actions can be seen as an indicator that law enforcement, regulators and the private sector are working to try and stay ahead of those who abuse cryptoassets to commit crimes and launder the proceeds. As in many other jurisdictions, Brazil's crypto sector has little regulation. Enforcement action against those who use it for money laundering and tax evasion has proven especially difficult. Yet there is an appetite for tighter legislation.

With six crypto exchanges, four financial institutions and three accountancy firms all coming under the scrutiny of Operation Colossus, Brazil appears to be intensifying its action against crypto-related crime.

The country has created a unit dedicated to investigating such crime. It helps prosecutors carry out crypto investigations and educates the public on the rights and wrongs of using digital assets. It will take on the most highly trained agents, equipping them with both a knowledge of the market and the tools required to ensure proper investigations.

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