The Department of Justice (DOJ) has seized $24 million in virtual currency on behalf of the Brazilian government, according to a press release.

The seizure stemmed from a cryptocurrency fraud scheme being investigated by Brazilian federal police called Operation Egypto. It involved the defrauding of tens of thousands of Brazilian residents for over $200 million, the release stated.

Federal prosecutors in Brazil have charged numerous individuals, with the U.S. seizures connected to Brazil resident Marcos Antonio Fagundes’ reported role in the scheme. Fagundes, the release stated, has been charged with numerous crimes, including “operation of a financial institution without legal authorization, fraudulent management of a financial institution, misappropriation, and money laundering,” along with violating securities laws.

According to the release, the crimes took place between August 2017 and May 2019, at which time Fagundes and other defendants solicited funds from prospective investors online, sometimes using the phone to do so as well, promising innovative investment opportunities in cryptocurrency. They reportedly held the funds in a way that would’ve mandated regulation under Brazilian law, with which Fagundes and the others allegedly didn’t comply.

They told investors the money would be going toward investments in virtual currencies. But the release stated that only a “very small amount” of funds were invested that way, and almost none were returned to investors. Fagundes and the other suspects allegedly made “false and inconsistent promises” about the way the funds were invested, exaggerating the rate of return.

Cryptocurrency has become something of a go-to method for scammers, according to DOJ, as exchanges are often lightly regulated and there are no easy ways to follow the money. As such, crypto is used more often for illicit purchases of drugs. Officials worry the form could be used in the future to fund cyberattacks, although this has not fully evolved.

In addition, the Financial Crimes Enforcement Network (FinCEN) has warned banks to look out for cryptocurrency-related fraud, with reports rising due to pandemic-related chaos in recent months.

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