Brazil passes a new law to confiscate cryptocurrency assets for public safety expenditures, increasing efforts to combat crime

Brazilian President Lula has signed Law No. 15,358, which explicitly incorporates seized cryptocurrency assets during law enforcement into the public safety funding system for expenditures such as police equipment, intelligence operations, and personnel training.

The law allows for the temporary use of relevant cryptocurrency assets prior to final conviction with court approval. The new regulations significantly expand the powers of judicial authorities, allowing them to freeze, block, or confiscate cryptocurrency assets during the investigation phase, including restricting access to exchange accounts, digital wallets, and related platforms. Once convicted, involved individuals will be permanently disqualified from using the formal financial system and cryptocurrency systems. Additionally, the law classifies the use of encrypted communication tools or privacy technologies to conceal criminal activities as an aggravating circumstance, promotes transnational asset recovery and intelligence sharing, and establishes a national-level database to integrate the financial structures of criminal organizations. Analysts believe this initiative marks Brazil's shift of cryptocurrency assets from a potential reserve tool to a law enforcement resource, strengthening the crackdown on organized crime (such as PCC and Comando Vermelho) while advancing the judicial system's regulatory and disposal capabilities regarding digital assets.