The collapse of a Brazilian bank that cost billions to depositors and insurers has reached the Federal Supreme Court and the country’s presidential election.
Banco Master collapsed in November 2025 after attracting hundreds of thousands of savers with returns above average. Ten months later, allegations involving the owner, Daniel Vorcaro, dragged one of Brazil’s most powerful judicial officials to the center of the scandal.
On September 15, the Federal Supreme Court is set to decide whether Justice Alexandre de Moraes will be investigated over alleged conversations with Vorcaro. The session places the Court in a unique position: examining one of its own members.
Brazil’s biggest banking scandal?
Police evidence released this month indicates that the bank’s owner, Vorcaro, contacted Moraes shortly before he was arrested. Moraes’ wife’s office also had a R$ 130 million contract with Master Bank.
Moraes denies any irregularities. He accuses Minister André Mendonça, who is responsible for the investigation, of abuse of authority for making the documents public. The impasse adds a new element to an already costly failure of the bank.
Master Bank offered CDBs that paid up to 140% of the CDI. It used this expensive resource to grow quickly, while keeping complex assets with low liquidity.
But the model collapsed.
The Central Bank of Brazil liquidated Master, citing a serious liquidity crisis and serious violations. The Credit Guarantee Fund has already paid about R$ 40.2 billion to 722 thousand clients linked to the group.
Legal consequences may expand if investigators prove a conflict involving Moraes.
Legal consequences may expand if investigators prove a conflict involving Moraes. “Potentially, but not automatically,” said João Luiz, managing partner at J. Pereira Advogados, when asked whether earlier sentences could be challenged.
He explained that any proven unlawful conduct would not invalidate all of Moraes’ decision-making history. However, defendants in specific cases could have stronger arguments to challenge rulings if a lack of impartiality were shown.
In this scenario, the scandal became part of Brazil’s election campaign.
Senator Flávio Bolsonaro called for Moraes to be removed from office and told supporters that voting for President Lula da Silva means agreeing with this scandal.
“Whoever votes for Lula is voting for Alexandre de Moraes,” Bolsonaro declared.
However, Bolsonaro himself is also involved in the scandal and faces questions about resources linked to the bank meant for a film about his father. He denies wrongdoing.
A bank that once promised impressive returns has now caused an even bigger problem for the country. This has turned into a fight over trust in the Judiciary, in regulatory authorities, and in Brazil’s political system.
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