Operation Narco Azimut II: Federal Police Dismantles Billion-Dollar Crypto Money Laundering Scheme
On the morning of March 26, 2026, the Brazilian Federal Police launched the second phase of Operation Narco Azimut, one of the largest crackdowns on cryptocurrency-related money laundering ever carried out in Brazil. The operation resulted in the freezing of R$ 934 million in assets, the execution of 26 search and seizure warrants, and the arrest of 7 suspects linked to a sophisticated criminal organization.
The operation mobilized around 50 federal agents, who acted simultaneously across four cities in the states of São Paulo and Santa Catarina: São Paulo (capital), Ilhabela, Taboão da Serra, and Balneário Camboriú. The warrants were issued by the 5th Federal Court in Santos/SP, which authorized both the searches and temporary arrests, as well as asset seizures.
How the Scheme Worked
Investigations revealed a complex and well-structured criminal operation. The organization used a combination of three financial mechanisms to move and conceal illicit funds: cash, bank transfers, and crypto assets.
At the center of the scheme were shell companies and individuals recruited specifically to provide a façade of legitimacy to transactions. These “corporate proxies” carried out high-value financial operations that acted as a buffer layer between dirty money and the final beneficiaries. The organization managed to move more than R$ 260 million through this structure before being identified by authorities.
The use of crypto assets was a core component of the operation. Digital currencies acted as a bridge between the traditional financial system and illicit activities, enabling fast transactions that are harder to trace and bypassing compliance checks typically applied by traditional banks. Funds were converted into crypto, transferred across wallets, and later reconverted into fiat currency via exchanges and P2P operations.
The Money Trail: From Santos to Abroad
The choice of locations was not coincidental. Santos, as the largest port in Latin America, has historically been a strategic route for international trafficking and associated money laundering. Balneário Camboriú, on the coast of Santa Catarina, has in recent years become a hub for wealth concentration linked to criminal organizations, with investments in high-end real estate serving both as laundering mechanisms and stores of value.
Ilhabela and Taboão da Serra functioned as operational bases, where companies registered under third-party names processed financial transactions. Their proximity to São Paulo facilitated operational logistics, while being outside major urban centers made monitoring more difficult for authorities.
Currency evasion was also a key component of the scheme. A significant portion of the funds was sent abroad, constituting foreign exchange evasion in addition to money laundering. Cryptocurrencies were particularly useful in this aspect, enabling international transfers that bypassed controls imposed by the Central Bank and the Federal Revenue Service.
R$ 934 Million Frozen: What Was Seized
The volume of seized assets is striking. The R$ 934 million includes real estate, luxury vehicles, bank accounts, financial investments, and crypto assets tracked in the suspects’ digital wallets. This amount represents wealth accumulated over years of criminal activity.
To put this into perspective: R$ 934 million exceeds the annual budgets of dozens of Brazilian municipalities. The seizure of these assets aims not only to punish those involved but also to financially cripple the organization, preventing the funds from continuing to circulate in the financial system.
Context: A Continuation of Previous Operations
Narco Azimut II did not emerge in isolation. It is a direct continuation of Operations Narco Bet and Narco Azimut (first phase), which had already identified the group’s activities involving the movement of funds through cash, bank transfers, and crypto assets, both in Brazil and abroad.
This continuity demonstrates that the Federal Police has been treating crypto-related money laundering as an ongoing investigative priority rather than isolated enforcement actions. With each phase, new branches of the scheme are uncovered, leading to additional warrants and further asset freezes.
The Brazilian Landscape of Crypto-Related Crime
Operation Narco Azimut II takes place within a broader context of increasing enforcement against financial crimes involving crypto assets in Brazil. In March 2026, President Lula sanctioned Law No. 15.358/2026 (Legal Framework for Combating Organized Crime), which, among other measures, explicitly prohibits individuals convicted of organized crime from operating on cryptocurrency exchanges.
In addition to Narco Azimut, the Federal Police also carried out Operation Decrypted II in March, which led to the arrest of a suspect in Maranhão for fraud involving crypto wallets with connections to the United States (US$ 2.6 million diverted), and Operation Fallax, which dismantled a criminal organization within Caixa Econômica Federal, resulting in 21 arrests and R$ 47 million in frozen assets.
The intensification of these operations signals that the use of cryptocurrencies for money laundering is firmly on the radar of Brazilian authorities. With increasingly sophisticated blockchain tracking tools and growing international cooperation, the window of impunity for those using crypto as a tool for crime is rapidly closing.
Charges
The suspects will face three serious criminal charges:
- Criminal association (Article 288 of the Brazilian Penal Code): 1 to 3 years of imprisonment
- Money laundering (Law 9.613/98): 3 to 10 years of imprisonment and fines
- Foreign exchange evasion (Law 7.492/86): 2 to 6 years of imprisonment and fines
With the evidence collected during the searches and blockchain transaction tracking, the expectation is that the Federal Public Prosecutor’s Office will file formal charges in the coming months, converting temporary arrests into pre-trial detention and advancing the case to the trial phase.