The Brazilian government has proposed a law allowing the sale of Bitcoin and other cryptocurrencies seized during criminal investigations at a time when the country appears to be cracking down on organized crime.
Bill 5.582/2025, sent to Congress by President Luiz Inácio Lula da Silva, would allow financial institutions to liquidate cryptocurrencies even before the outcome of court cases, just as foreign currencies, checks and securities are. It is unclear what will happen if the suspects are later acquitted.
Officials said the measure aims to hit gangs where it hurts: their wallets, and is part of a broader “anti-faction bill” that changes legislation on criminal organizations and Brazil’s criminal procedure code. It targets the financial infrastructure of gangs like Comando Vermelho, one of the most powerful criminal factions in the country,
The timing of the proposal is remarkable. It comes days after a major police operation in Rio’s favelas left 121 people dead, most of them suspected gang members, in what is now the country’s deadliest police raid.
Authorities said the raid targeted Comando Vermelho leaders and involved more than 2,500 officers.
Efforts to liquidate seized crypto assets are occurring alongside a major regulatory overhaul by Brazil’s central bank. The central bank has issued new rules requiring crypto companies to be licensed and hold capital reserves ranging from R$10.8 million ($2 million) to R$37.2 million, depending on their activities.
The rules, which will take effect in February, classify a wide range of crypto activities under Brazil’s foreign exchange and capital markets laws.
They require companies to report international transactions, including payments in stablecoins and transfers to custodial wallets, and impose a cap of $100,000 on each transaction involving currencies.
The anti-faction bill is under urgent consideration in Congress and must be voted on by December 18.
