Tax Dispute in Brazil Regarding Gambling and Crypto Sales Leads to $213M Tether Freeze for Gurhan Kiziloz

A tax dispute in Brazil tied to gambling operations and cryptocurrency sales has led to the freezing of more than $213 million in digital assets linked to Gurhan Kiziloz.

The freeze was carried out by Tether and reportedly affects 48 USDT wallets connected to entities associated with Kiziloz. The action follows a Brazilian court ruling connected to operations conducted between 2021 and 2024, a period during which the country’s regulatory framework for online gambling and digital assets was still evolving.

According to reports surrounding the matter, Brazilian authorities argued that gambling-related activity targeting local users, along with cryptocurrency token sales connected to the business, generated taxable revenue inside the country. Regulators reportedly maintained that those activities created tax obligations under Brazilian law even before the country finalized its current licensing and oversight systems.

The dispute centers on taxes allegedly tied to gambling services and crypto-related sales conducted during that period. Authorities pursued claims connected to revenue generated from Brazilian users while many offshore operators and crypto businesses continued operating through international structures during what was widely viewed as a regulatory gray area.

According to reports, Kiziloz and his legal team are appealing against the government’s tax claims tied to the 2021–2024 period.

The case has become one of the more notable crypto-related enforcement actions connected to gambling taxation and digital asset sales in Brazil in recent years. It also highlights the increasing role stablecoin issuers now play in legal and financial enforcement involving blockchain-based assets.

While cryptocurrencies are often associated with decentralization, stablecoin issuers maintain centralized control mechanisms that allow wallets and transfers to be frozen in response to court orders and legal rulings. Tether has increasingly cooperated with authorities worldwide in matters involving financial disputes, sanctions, cybercrime investigations, and regulatory enforcement tied to digital assets.

Brazil has expanded oversight around offshore gambling businesses, token-related revenue streams, and cryptocurrency transactions as regulators continue building a more formalized framework for both industries. The dispute involving Kiziloz reflects the broader effort by authorities to review historical business activity conducted before clearer regulation was introduced.

No criminal charges have been filed, and the matter remains a civil tax dispute between Gurhan Kiziloz and Brazilian authorities. We reached out to Gurhan Kiziloz for comment regarding the frozen assets and ongoing legal proceedings, but have not received any response so far.