Brazil Signs Law Allowing Seizure of Bitcoin and Crypto Linked to Crime

Brazil has passed a new law allowing authorities to freeze, seize, and liquidate digital assets, including cryptocurrencies, tied to serious crimes. However, President Luiz Inácio Lula da Silva signed the bill, expanding enforcement powers and redirecting seized crypto to public security funding.

Brazil Law Allows Seizure of Bitcoin and Digital Assets

According to Law No. 15.358, authorities can now block or confiscate “digital or virtual assets” during criminal investigations. The rule applies when courts find strong evidence linked to organized crime, paramilitary groups, or private militias.

Judges can order precautionary actions such as freezing wallets, blocking exchange accounts, and restricting access to online platforms. The law allows courts to approve early liquidation of seized crypto before final conviction.

Authorities will redirect recovered funds to public security budgets, marking a shift in crypto treatment.

Authorities Can Freeze Wallets and Exchanges

The legislation expands enforcement tools by allowing authorities to suspend access to exchanges, digital wallets, and financial platforms during investigations. Meanwhile, authorities can apply permanent restrictions after conviction.

The law also strengthens international cooperation, allowing Brazil to work with foreign agencies to track and recover digital assets across borders. Officials aim to stop criminal groups from moving funds between jurisdictions.

In addition, the measure creates a national criminal database that links the financial structures of known criminal organizations. The system improves coordination between police, prosecutors, and courts.

Brazil Chooses Seized Crypto Over Bitcoin Reserve

The new law comes as Brazil debates broader crypto policies. In August 2025, lawmakers discussed creating a national Bitcoin reserve. 

Coinpedia news reported that a revised proposal introduced in February 2026 suggested allowing purchases of up to 1 million BTC, though no decision has been finalized.

Instead of building a reserve, the government chose to redirect seized crypto funds to law enforcement.

Crypto Adoption Growing in Brazil

Brazil’s crypto adoption continues to rise. Around 17.5% of the population, roughly 16 million people, now own cryptocurrency. Public companies in Brazil hold about 4,328 BTC, valued at nearly $296 million, with additional exposure through ETFs and exchanges.

Meanwhile, Bitcoin is trading near $68,572, down about 2% in the last 24 hours, as markets react to broader macro pressure.

The new law signals that Brazil is moving beyond regulation and toward actively using seized crypto assets within state systems.