Brazil's Federal Tax Agency deploys AI tool to detect illegal cryptocurrency transactions, preventing over $180 million in tax fraud and money laundering.
In a report last week, Brazil’s Federal Tax Agency (RFB) announced the deployment of an artificial intelligence (AI) tool to improve the efficiency of detecting illicit cryptocurrency transactions. The tool, developed internally by the RFB, uses sophisticated AI algorithms and network analysis to sift through tax data to identify suspicious transactions and improve investigation efficiency.
The RFB has seen early success with the tool in two specific cases. The first involved a complex scheme in which more than $125 million was funneled through front companies to purchase cryptocurrency. The AI tool detected links between suspicious imports and transfers, tax evasion, and other potential crimes.
The second case was a money laundering case involving cryptocurrencies, involving drug trafficking, arms trafficking, and tax evasion. The AI tool helped RFB identify companies set up for tax evasion and individuals benefiting from this activity by analyzing transaction flows of various cryptocurrencies.
Enhancing surveillance capacity in the digital age
The application of AI in the tax sector is not limited to the RFB. The Central Bank of Brazil is also studying the integration of AI into its pilot project of a central bank digital currency (CBDC). To promote this initiative, the bank has established the Center of Excellence in Data Science and Artificial Intelligence (Cde IA), which focuses on research and development of AI applications in the financial sector.
According to Central Bank President Roberto Campos Neto, the application of AI is part of the bank's digital transformation strategy, aiming to improve operational efficiency and adapt to the rapid development of financial technology.