Brazil’s Federal Revenue Service has recently revealed the use of an internal AI-powered tool designed to detect money laundering and tax evasion through cryptocurrency transactions. This advanced tool has already identified over $180 million in funds tied to illicit cryptocurrency activities.
How AI is Aiding Brazil’s Tax Authorities
Government agencies around the world are increasingly turning to artificial intelligence (AI) to streamline their operations.
Brazil’s Federal Revenue Service has joined this trend, announcing that it is utilizing AI-based algorithms and complex network analysis to identify fraudulent financial activities.
The tool was developed in-house and focuses on flagging cryptocurrency transactions linked to illegal behavior, enhancing the efficiency of the agency’s investigations.
According to a recent statement, the AI tool played a critical role in detecting two major cases of cryptocurrency fraud.
In the first case, the system uncovered a scheme involving over $125 million in transactions by shell companies. These companies were allegedly purchasing cryptocurrencies and masking fraudulent import and remittance operations.
The AI’s ability to detect tax irregularities and other financial crimes proved essential in exposing the scheme.
The second case involved money laundering connected to drug trafficking, arms dealing, and tax evasion, all involving cryptocurrency. The AI-driven tool was instrumental in tracking suspicious financial flows, helping authorities trace the perpetrators.
A Broader Move Toward AI in Government
The Federal Revenue Service isn’t the only Brazilian institution exploring the potential of AI. Roberto Campos Neto, President of the Central Bank of Brazil, recently shared that the bank is studying AI applications for its Central Bank Digital Currency (CBDC) pilot program.
The Central Bank has even established a dedicated AI division, the Center of Excellence in Data Science and Artificial Intelligence (Cde IA), to advance these initiatives.
This growing reliance on AI technology marks a significant shift in how Brazil’s government is addressing complex financial crimes, especially in the rapidly evolving world of cryptocurrency. As these tools continue to prove their effectiveness, their role in law enforcement and financial regulation will likely expand even further.