Brazilian President Luiz Inácio Lula da Silva has signed a sweeping series of reforms aimed at dismantling organized crime, and cryptocurrencies are at the center of the strategy.
Under Law No. 15.358, enacted on March 25, cryptoassets confiscated from criminal organizations can be routed to Brazil’s public security system.
This includes funding for police equipment, intelligence operations and officer training. The law explicitly allows the provisional use of these assets before a final conviction, provided it is approved by a judge.
Rather than treating seized cryptocurrencies as a potential store of value for the state, an idea floated by some crypto proponents, the government is using them as a tool of repression against groups like the PCC and Comando Vermelho.
The move is part of Brazil’s broader efforts to modernize the justice system’s management of digital property and organized crime.
The legislation also significantly expands judicial power to freeze, block or seize cryptoassets during investigations, including suspending access to exchanges, digital wallets and online platforms. Once found guilty, individuals permanently lose access to formal financial and crypto systems.
The law defines the use of encrypted messaging apps or privacy tools to conceal criminal activity as an aggravating circumstance, increasing potential penalties.
It also enables international cooperation in asset recovery and intelligence sharing, and creates a national criminal database incorporating the financial structures of known criminal groups.
