Brazil notifies 37 fintechs over money flows tied to illegal betting, sets August 28 deadline

The Lula administration has notified 37 fintechs that allegedly moved money for illegal betting operations in Brazil, and the message is blunt: stop the flows by August 28 or have accounts and funds blocked. For PSPs and payment firms, this is the kind of enforcement move that turns “know your merchant” into “know your merchant’s merchant.”

1. The notifications were sent jointly by the Secretariat of Prizes and Bets (SPA) and the Federal Revenue Service. The government says the firms are suspected of moving money linked to illegal bets in Brazil, and the goal is to block the illicit funds and confiscate them for the federal treasury.
2. In June, the government identified these companies as having processed transactions for 160 illegal betting houses and more than 40,000 related websites. In the same period, more than 54,000 irregular sites were taken down.
3. The government has not disclosed the list of the 37 fintechs, saying that would jeopardize the investigations. That leaves the market with the usual uncomfortable position: everybody gets the signal, nobody gets the names.
4. The new rules were approved by the National Monetary Council (CMN) and enter into force on August 28, which is the deadline for the institutions to comply with the notifications. From that date, non-compliant fintechs will have 24 hours to block all accounts, including demand deposits, savings accounts, prepaid payment accounts, and registration accounts.
5. Under the resolution, once those accounts are blocked, the funds sitting in them become unavailable. The rule also bars transactions to those accounts when funds are detected as being intended, directly or indirectly, for betting. If the institutions fail to comply, they can be held jointly liable for the illegal funds and fined the amount that was moved. The blocked amounts will be sent to the National Public Security Fund.

For high-risk processors, the practical takeaway is simple: Brazil is moving from site takedowns to payment-side enforcement. If your merchant base touches betting, the question is no longer only whether the merchant is licensed, but whether the payment chain can withstand a regulatory sweep that reaches into accounts, balances, and liability.