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Brazil uncovers $180 million crypto tax fraud using AI

GrafaGrafa2024/09/10 09:45
By:Liezl Gambe

The Brazilian Federal Revenue Service, the nation's tax authority, has revealed that it is using an in-house artificial intelligence (AI) tool to detect money laundering and tax evasion involving cryptocurrencies.

This AI-powered tool has already identified over $180 million in illicit funds linked to cryptocurrency transactions.

The tool, developed internally by the Federal Revenue Service, utilises AI algorithms and complex network analysis to scrutinise tax data more effectively.

The tool has enhanced the agency's ability to detect suspicious transactions, improving the productivity of investigations.

In one instance, the tool uncovered a scheme involving over $125 million moved by shell companies to purchase cryptocurrencies.

It connected these transactions with suspicious import and remittance activities, tax irregularities, and potentially other crimes.

In another case, the AI tool identified money laundering operations related to drug and arms trafficking and tax evasion using cryptocurrency.

The tool also helped detect companies set up primarily for tax evasion purposes and identified the beneficiaries by tracking the flow of various cryptocurrencies.

The Federal Revenue Service's initiative is part of a broader trend among government agencies to incorporate AI tools to enhance their efficiency in combating financial crimes.

The Central Bank of Brazil is also exploring the use of AI in its central bank digital currency (CBDC) pilot, creating a specialised division called the Center of Excellence for Data Science and Artificial Intelligence (Cde IA).

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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