Brazilian authorities have successfully dismantled a sophisticated money laundering network with assistance from Tether, the issuer of the USDT stablecoin. The operation, referred to as Operation Magna Fraus, demonstrates the increasing role of blockchain-based tools in combating financial crime and highlights how real-time crypto tracking may now be outpacing traditional investigative methods.
Tether revealed its involvement on July 18, stating that it collaborated with Brazilian law enforcement to take down a cyber fraud ring that had been operating across multiple regions. According to the official release, the operation was jointly executed by the São Paulo Public Prosecutor’s Office and the Federal Police. The criminal group was reportedly exploiting Brazil’s PIX instant payment system to redirect funds into USDT, facilitating large-scale laundering of illicit assets.
Millions Seized in Crypto During National Raids
The enforcement operation spanned two days and covered the states of Goiás and Pará. During the raids, authorities seized R$5.5 million worth of cryptocurrency and successfully froze an additional R$32 million (approximately $5.7 million) in USDT, marking one of Brazil’s most significant crypto-related seizures to date. Tether’s tracking capabilities were central to identifying the funds and executing the freeze, underscoring the advantages of blockchain transparency in modern financial investigations.
An unusual but critical discovery during the raids included the retrieval of a private key linked to stolen crypto funds. This key granted law enforcement direct access to digital wallets believed to hold illicit assets, which were subsequently moved into state control.
According to the São Paulo Public Prosecutor’s Office, all seized funds will be liquidated and placed under judicial management. These assets will be monitored by Brazil’s Criminal Court specializing in tax crimes, criminal organizations, and money laundering. This legal framework ensures that any financial recovery remains within the purview of the country’s justice system throughout the judicial process.
Tether’s Expanding Role in Global Enforcement
Tether’s cooperation with law enforcement agencies has become increasingly prominent. Within the last year, the company has played a role in several major international investigations. In June 2024, the U.S. Department of Justice acknowledged Tether’s assistance in seizing $225 million in USDT connected to a significant fraud case. Shortly afterward, the company helped the U.S. Secret Service freeze $23 million associated with transactions on Garantex, a Russian exchange under sanctions, and an additional $9 million related to the Bybit exchange breach.
Overall, Tether has now blocked more than 5,000 wallets, with a substantial portion of this activity conducted in coordination with U.S. authorities. This trend points to a notable shift in how stablecoins are being monitored and regulated within the global financial system.
The success of Operation Magna Fraus reflects the increasing importance of public-private partnerships in tackling financial crime. As stablecoins become more deeply integrated into the global economy, blockchain-based platforms like Tether are emerging as critical tools for enforcing legal compliance and safeguarding digital financial ecosystems.