Brazil has passed legislation to include seized cryptocurrencies in its "Public Security Fund," while simultaneously expanding law enforcement and freezing powers.

Brazil has taken a new step in regulating cryptocurrency and combating financial crime. In response to the growing problem of transnational crime and money laundering, President Luiz Inácio Lula da Silva officially signed Law No. 15,358 . This new regulation not only significantly expands the powers of the judiciary but also, for the first time, establishes the conversion of seized cryptocurrency assets into "strategic reserves" for national public security.

In the past, many countries have faced lengthy legal procedures and asset disposal challenges when dealing with seized digital assets. However, the Brazilian government has demonstrated a strong determination to enforce the law, attempting to transform the illicit proceeds of criminal organizations into a powerful tool for combating crime through legal innovation.

The seized cryptocurrency will be used for security upgrades.

Under Law No. 15,358, crypto assets seized by law enforcement agencies during investigations will be integrated into the Public Security Funding System. The future uses of these funds are clearly defined, including the purchase of police equipment, support for high-level intelligence operations, and professional training for law enforcement personnel.

More notably, the regulation allows for the "temporary use" of these seized assets, subject to court approval, before a final judgment is reached. This means that police and intelligence agencies can receive funding more quickly, without having to wait for years of legal proceedings to conclude.

Expanding judicial authority and issuing permanent injunctions

To prevent criminals from transferring funds, the new law also grants authorities stronger investigative powers. During an investigation, law enforcement agencies have the authority to freeze, block, or confiscate a suspect's cryptocurrency assets at any time. This restriction extends beyond cryptocurrency exchange accounts to digital wallets and other related platforms.

Furthermore, for individuals ultimately convicted, the law imposes extremely severe penalties: they will be permanently banned from using formal financial and cryptocurrency systems. Additionally, if suspects use encrypted communication software or privacy technologies to conceal their illegal activities during the commission of a crime, this will be considered an element of "aggravated punishment."

Targeting large criminal gangs and promoting transnational intelligence sharing

At the macro-strategic level, the new law also actively promotes international asset recovery and intelligence sharing mechanisms, and plans to establish a national database specifically for integrating and tracking the financial structures of criminal organizations.

Analysts point out that this move symbolizes the Brazilian government's formal transformation of crypto assets from a "potential reserve tool" into a key "law enforcement resource." This will significantly strengthen the authorities' ability to combat large-scale transnational organized crime, particularly powerful gangs such as the First Command in the Capital (PCC) and the Red Command (Comando Vermelho). This is not only a significant milestone in Brazilian law enforcement history but also provides a highly valuable example for how global judicial systems should regulate and manage digital assets.

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