Brazil passed a historic law that gives officials broad new powers to freeze and seize Bitcoin and other cryptocurrencies linked to crime. The law also allows the state to channel confiscated digital assets into public safety budgets, so money generated by crime can fund police and investigations.
What the New Crypto Seizure Law Does
As part of a larger effort to fight organized crime, especially strong gangs like PCC and Comando Vermelho, President Luiz Inácio Lula da Silva signed Law No. 15.358. If there is proof that wallets, exchanges, or payment systems facilitated the movement of unlawful funds, the law permits judges to freeze, block, or seize Bitcoin assets during investigations.
To prevent speedy transfers, courts have the authority to deny suspects access to exchange accounts, digital wallets, and associated online services without giving them advance notice.
In certain situations, judges may even permit the liquidation of confiscated cryptocurrency prior to a formal conviction, treating it in accordance with asset-forfeiture laws, such as those governing foreign currency or equities.
How Seized Bitcoin and Crypto Will Be Used
According to the report, Brazil can convert seized cryptocurrency into reais under the new system and transfer the funds to state and federal public security funds. Instead of leaving the funds idle as speculative assets, officials believe agencies would use the money for police equipment, training, intelligence work, and special operations.
In recent anti-money-laundering operations, authorities have already confiscated the equivalent of billions of reais, including substantial Bitcoin holdings, demonstrating the magnitude of possible inflows. Proponents contend that using these resources as a “security war chest” creates a vicious cycle in which illicit cryptocurrency transfers support the battle against the same organizations.
The law also treats the use of encrypted messaging apps, privacy tools, or mixers to hide criminal activity as an aggravating factor that can raise sentences. Once convicted, offenders may face permanent exclusion from the formal financial system, including regulated crypto platforms and payment providers.
Brazil is pairing these domestic powers with stronger international cooperation on asset tracing and recovery. The legislation supports cross-border information sharing and the creation of national databases that track the financial structures of criminal groups, with a clear focus on digital assets and online payment rails.
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