By Akracia – Fenikso Nigra
In November 2025, the Central Bank decreed the extrajudicial liquidation of Banco Master, ending a trajectory of accelerated growth sustained by offering returns far above market average. Investigations revealed a billionaire fraud scheme involving fictitious loans, suspicious investment funds, and political connections crossing all three branches of government. The case exposes not only technical supervision failures but how political and economic power intertwine to protect specific interests.
Banco Master grew rapidly by offering Bank Deposit Certificates with above-average profitability. To sustain this model, according to investigators, the institution assumed excessive risks and structured operations that artificially inflated its balance sheet. Between 2023 and 2024, an estimated 11.5 billion reais were diverted through triangulations: the bank lent resources to shell companies that invested in funds managed by Reag Investimentos; these funds bought worthless assets at inflated prices. The scheme maintained an appearance of solidity while real liquidity disappeared.
When the liquidity crisis became unsustainable, rescue attempts began. Banco de Brasília, a public institution controlled by the Federal District government, announced in March 2025 its intention to buy 58% of Master’s capital for about 2 billion reais. The operation was vetoed by the Central Bank in September, citing excessive risks and incompatibility with the public institution’s profile. Investigations revealed that BRB had already acquired approximately 12.7 billion in suspicious credit portfolios from Master, possibly fictitious, without proper due diligence.
The network of political relationships that sustained Master’s rise reveals how concentrated economic power builds institutional protections. Controller Daniel Vorcaro established connections with figures from the Executive, Legislative, and Judiciary. Senators, deputies, governors, and ministers appear in investigations as intermediaries who facilitated negotiations, opened channels, or tried to influence regulatory decisions. A law firm linked to a Supreme Court minister maintained a 129 million reais contract with the bank, with monthly payments of 3.6 million between 2024 and 2027.
The institutional response to the scandal also deserves critical attention. The case was centralized in the Supreme Federal Court under strict secrecy, making public monitoring difficult. There were tensions between the Central Bank, the Federal Court of Accounts, and the Supreme Court itself over competencies and access to information. These disputes are not merely technical about procedures but reflect power correlations about who controls the narrative and which aspects of the case will be investigated more deeply.
The Securities and Exchange Commission, the body responsible for supervising risk rating agencies and investment funds, had been receiving alerts about structural problems since 2020, when a Court of Accounts audit pointed out supervision weaknesses. Little was done. In October 2024, rating agency Fitch raised Master’s rating to a high level, a classification highlighted by institutions like XP Investimentos. One month later, the bank collapsed. The CVM remained without a permanent president for months, precisely during the period when the scandal erupted.
The financial consequences fall, as always, on those with the least capacity to defend themselves. The Credit Guarantee Fund estimated it would disburse about 41 billion reais to reimburse approximately 1.6 million clients, the largest rescue in the fund’s history. The coverage limit is 250 thousand reais per person. State and municipal pension funds that invested 1.86 billion in Master products will not be reimbursed because these investments lack coverage. Future retirements of public workers are compromised by investment decisions that prioritized profitability over safety.
The Master case is not exceptional but exemplary. It reveals recurring patterns in the Brazilian financial system: accelerated growth based on unsustainable promises, fundraising from small investors attracted by high returns, political connections that delay effective supervision, rescue attempts with public resources when fraud becomes unavoidable. This cycle repeats because the structures that allow its existence remain untouched.
Historical experiences in various parts of the world demonstrate possibilities for organizing credit and savings according to different principles. In Argentina, during the crises of the early 2000s, exchange clubs and community banks allowed communities to maintain economic activity when the traditional banking system collapsed. Local currencies and mutual credit systems sustained families and small businesses without depending on conventional financial institutions.
In Brazil, community development banks emerged in urban peripheries like Conjunto Palmeiras in Fortaleza, creating microcredit systems controlled by the community itself. Decisions about granting credit, interest rates, and resource allocation are made in assemblies by those who actually use the services. Default rates are low because credibility is built through community relationships, not automated risk analyses.
Credit cooperatives, when actually controlled by members and not captured by professionalized management groups, demonstrate the viability of financial institutions where strategic decisions are made democratically. Interest rates, investment policies, and surplus distribution follow assembly deliberations, not profit maximization for distant shareholders.
Various anarchist strands question not only specific fraudulent practices but the very concentration of credit in hierarchical institutions regulated by agencies that frequently serve the regulated. The central question is not improving supervision within the current system but recognizing that systems based on unlimited growth, maximum profitability, and concentration of decisions create structural incentives for predatory behaviors.
The Master case also reveals limits of state protection for investors. The Guarantee Fund covers deposits up to a certain limit but is financed by the banks themselves—that is, indirectly by account holders through fees and bank spreads. When private investment funds collapse, there is no protection. When public banks buy toxic assets to rescue private institutions, the cost eventually falls on public budgets. The socialization of losses and privatization of profits is not a system failure but its normal functioning.
Recognizing these patterns opens space for practical action. Reducing dependence on large financial institutions through authentic credit cooperatives, community banks, and collective savings systems. Demanding total transparency in connections between political agents and financial institutions, exposing conflicts of interest that cross branches of government. Supporting regulation that prioritizes protection of small investors over facilitating business for large financial groups.
Banco Master will continue to be investigated, assets will be disputed, responsibilities eventually attributed. Meanwhile, 1.6 million people await reimbursement, pension funds face billion-real holes, Rio de Janeiro public workers see their future retirements compromised. And new institutions already offer miraculous returns, sustained by new networks of influence, preparing future crises that will follow the same pattern: rapid growth, regulatory capture, collapse, socialization of losses.
In struggle, we are dignified and free people!
