Brazil is Latin America’s largest crypto market, and one of the world’s most dynamic. Between July 2024 and June 2025, the country received an estimated $318 billion in on-chain value, roughly one-third of all cryptocurrency value received across Latin America. A large, relatively young population, a vibrant fintech sector that has normalized digital financial services for millions, and persistent demand for dollar-pegged stablecoins as an inflation hedge have all fueled that growth.
But when a legitimate market grows at such a pace, it draws attention from illicit actors, too. Our data shows that’s exactly what’s happening. The same criminal networks dominating crypto laundering activity worldwide — Chinese-language money laundering networks (CMLNs), Russian sanctions evaders, and drug traffickers — have found a significant foothold in Brazil’s exchanges, according to our data.
Crypto crime doesn’t respect borders. The money laundering networks, sanctioned entities, and drug trafficking organizations that define the global illicit crypto landscape are the same actors showing up in Brazilian exchange data — and according to our analysis, those three categories alone account for more than 50% of identified illicit inflows to select Brazilian exchanges in 2025.
And these global threat actors converge in Brazil at a pivotal moment. A new authorization regime for crypto firms took effect on 2 February 2026, with reporting obligations live since 4 May and a licensing deadline of 29 October. The illicit-flow patterns we describe below will be the first real test of that regime for the Banco Central do Brasil (BCB) as supervisor, and for the exchanges, custodians, and intermediaries now expected to detect and disrupt exactly this kind of activity.
The Global Picture: $154 Billion – A Maturing Threat Landscape
Total value received by illicit cryptocurrency addresses reached $154 billion in 2025, up from $59 billion in 2024 and just $11 billion in 2020. This isn’t simply a reflection of rising crypto adoption. The composition of illicit volume has changed fundamentally, and the actors behind it have become significantly more sophisticated. Criminal activity on-chain has professionalized markedly since 2020, with illicit organizations now building dedicated shared infrastructure, and nation-states entering the mix at unprecedented scale.
The asset composition of these flows has shifted just as dramatically. Stablecoins, once marginal in illicit activity, now account for the overwhelming majority of illicit crypto value, preferred by criminal actors for their price stability and settlement utility. This preference mirrors stablecoins’ dominance more broadly in the cryptocurrency ecosystem. Driving that volume are three categories that have come to define the global crypto money laundering ecosystem, and as our Brazilian exchange data makes clear, all three have found a home in Latin America’s largest market.
When we zoom into the money laundering specifically, three categories dominate the global picture, and all three show up in Brazil:
- The explosive growth of Chinese-Language Money Laundering Networks (CMLNs) are perhaps the single most important structural development in crypto crime over the past several years. These professionalized, organized enterprises provide money laundering as a service — primarily to drug trafficking organizations, fraud operations, and increasingly, nation-state actors. CMLNs now account for approximately 20% of the total on-chain illicit laundering ecosystem, a share that has grown consistently since 2021.
- Sanctions evasion has grown substantially in dollar terms. State-driven sanctions evasion alone reached approximately $104 billion in 2025, a 694% year-on-year surge, as nation-states and designated individuals increasingly turn to crypto to circumvent international financial restrictions. Sanctioned entities and jurisdictions now represent one of the largest single sources of illicit crypto value globally — a trend that, as we’ll show, reaches directly into Brazilian exchange infrastructure.
- Drug trafficking, via darknet markets and drug vendor activity, remains a persistent and stable feature of the illicit crypto landscape year over year — and one with particular regional resonance in Latin America.
20% of known illicit funds are now sent to CMLNs.
What Does This Mean for Brazil?
What makes Brazil’s situation particularly notable is that all three of these global threats converge there. Our analysis of illicit crypto inflows to Brazilian exchanges between 2023 and 2025 tells a clear story. In 2023, illicit inflows were dominated by a broad illicit activity. By 2024 and 2025, that picture had changed materially:
- Cartel-related money laundering emerged as the single largest identified category of illicit inflows, reflecting Brazil’s geographic position as both a drug transit corridor and a destination market. Brazil sits along key South American cocaine trafficking routes, and Brazilian organized crime groups — including the Primeiro Comando da Capital (PCC) and Comando Vermelho — have been documented using cryptocurrency as part of their financial operations, a trend corroborated by our on-chain data. Both groups are now designated as Foreign Terrorist Organizations in the United States.
- CMLN-linked flows appeared consistently across the period, connecting Brazilian exchanges to the same global Chinese-language money laundering infrastructure that services criminal groups worldwide. The presence of CMLNs in Brazil is consistent with a broader pattern across Latin America, where Chinese-language networks have established footholds in countries with active trade corridors and large informal economies, using crypto as a cross-border settlement layer.
- Russia-related flows, including entities subject to international sanctions, became a more visible component of the mix, particularly in 2024 and 2025. This reflects a global pattern: as traditional financial channels have tightened around sanctioned Russian entities following the 2022 invasion of Ukraine, crypto — and emerging markets with growing crypto infrastructure — have become increasingly attractive alternative corridors.
- Guarantee services, criminal escrow-type services associated with fraud and organized crime, also appeared in our data for Brazil in 2025, suggesting the local market is being integrated into broader criminal service ecosystems.
In the below chart, we examined illicit inflows to local exchanges in Brazil, excluding large global exchanges with Brazilian users. Each of the squares in the chart represents 1% of illicit volume received by Brazilian services. Many of the top global trends are playing out locally in Brazil, most notably growing exposure to Russia-related services, such as the A7A5 swap service and other sanctioned services, as well as South East Asian CMLN and guarantee services, which together make up the new backbone of illicit cyber infrastructure. We also see exposure to cartel money laundering, which is consistent with the intensity of this problem in the Western Hemisphere.
This data reflects the global nature of crypto crime, not a verdict on any individual exchange’s compliance posture. Networks operating across borders route funds through whichever on-ramps and off-ramps offer access, and Brazil’s large, growing market makes it an attractive target.
The Scale and Tractability of the Problem
One of the more nuanced findings from our Brazilian exchange analysis involves the relationship between the scope of illicit exposure and its tractability.
The number of distinct deposit addresses exposed to illicit inflows at Brazilian exchanges has ranged from roughly 550 to 950 per quarter between 2023 and early 2026. This broad distribution suggests criminal actors are spreading flows across many entry points to avoid detection.
At the same time, as shown in the chart below, the top five most-exposed deposit addresses per quarter have consistently accounted for between 75% and 90% of total illicit volume received. That high concentration is operationally significant: while the problem is broad, a meaningful share of illicit volume is traceable to a small number of high-risk addresses. This data shows real opportunities for intervention, helping teams zero in on the worst actors.
A high degree of illicit exposure is concentrated in relatively few deposit addresses. As of March 2026, approximately 80% of these illicit volumes went to five distinct addresses.
Brazil’s Crypto Market: Growing Fast, Regulating in Real Time
These illicit trends are unfolding against the backdrop of a Brazilian crypto market that has experienced substantial growth and is navigating a rapidly evolving regulatory environment.
Brazil is one of the world’s leading crypto adoption markets, driven by a large, relatively young population, persistent inflation that has historically driven interest in dollar-pegged stablecoins, and a vibrant fintech sector that has normalized digital financial services for millions of Brazilians.
In November 2025, the Banco Central do Brasil (BCB) published Resolutions 519, 520, and 521, operationalizing the 2022 Virtual Assets Law. The regime took effect on 2 February 2026 and introduces a licensing pathway for crypto service providers (SPSAVs) that captures domestic brokers, custodians, and intermediaries — as well as overseas firms serving Brazilian clients; AML/CFT obligations including the FATF Travel Rule; and the treatment of cross-border stablecoin transfers as FX activity under Resolution 521.
Reporting obligations went live on 4 May 2026, with the SPSAV licensing deadline for existing firms falling on 29 October. A separate CVM consultation on when crypto assets constitute securities is open until June 2026. Alongside the Receita Federal’s existing reporting and capital gains regime, this makes Brazil one of the more proactive crypto jurisdictions globally. Enforcement has kept pace, too: in March 2026, Law No. 15.358 gave authorities expanded powers to freeze, seize, and repurpose digital assets linked to organised crime.
Brazil’s approach also reflects a broader regional shift. Across Latin America, jurisdictions including Argentina, Mexico, and Colombia have each taken steps — at varying speeds and with varying degrees of comprehensiveness — toward crypto regulatory frameworks, driven in part by the scale of crypto adoption and in part by pressure from international bodies including FATF and the IMF. Brazil has moved further and faster than most, and its framework is increasingly seen as a regional model. The Chainalysis 2025 Geography of Cryptocurrency Report noted that Brazil received an estimated $318 billion in on-chain value between July 2024 and June 2025, approximately one-third of all value received in LATAM, which makes getting the right regulatory framework all the more important.
This regulatory maturation matters directly for the illicit trends we’ve described. A well-regulated, well-supervised exchange sector is a significantly harder environment for money laundering networks to exploit. The concentration of illicit volume among a small number of deposit addresses is precisely the kind of signal that Chainalysis Reactor, Data Solutions (DS), and KYT (Know Your Transaction) are built to surface — and this signal is already visible in Brazilian exchange data today. That means targeted intervention, reporting, and investigation are not future capabilities; they are available now.
What the Data Demands
The intersection of global crypto crime trends, Brazil’s newly operational regulatory framework, and its dynamic market creates both urgency and opportunity. Reporting under the BCB resolutions began on 4 May 2026; the SPSAV authorization deadline for existing firms falls on 29 October. The networks laundering drug cartel proceeds, evading sanctions, and servicing nation-state threat actors are active in the Brazilian ecosystem today which means the framework’s first real test will be how quickly authorized firms can translate AML/CFT and Travel Rule obligations into operational detection.
The opportunity is equally real: the data points to where that effort should concentrate. The same transparency which means these flows are traceable also makes them addressable: the consistent concentration of illicit volume among a small number of deposit addresses.
For Brazilian exchanges, regulators, and law enforcement, the compliance deadline becomes a near-term opportunity to demonstrate with on-chain evidence that targeted intervention can outpace the global threat actors that have arrived in the market.
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