Brazil Gives Police a New Crypto Tool

Brazil Grants Police Authority to Seize and Utilize Crypto Assets

Brazil’s lawmakers have enacted a new rule allowing law‑enforcement agencies to confiscate cryptocurrency used in criminal activities. The legislation, numbered 15.358, grants the state ownership of any digital money tied to a crime and permits its transfer to police forces for purposes such as purchasing equipment, conducting training programs, or funding special missions—subject to judicial approval each time.

The law also paves the way for international cooperation. When digital funds cross borders, Brazilian authorities can collaborate with foreign investigators to trace and recover the assets.

Given Brazil’s large cryptocurrency‑using population, the rule could significantly boost the government’s security budget. This development follows the finance minister’s decision to suspend changes to crypto tax policy until after the upcoming presidential election, a move intended to sidestep political controversy over taxation.

In 2025, the Federal Police launched Lusocoin, a major operation targeting a money‑laundering scheme that funneled billions of reais through shell companies, over‑the‑counter brokers, and unsecured wallets.

Unlike the United States—where seized crypto is held in a national reserve—Brazil’s law channels those funds directly into police work. Nonetheless, officials have discussed establishing a national Bitcoin reserve that could allocate up to 5 % of the treasury for crypto assets. While this proposal has resurfaced recently, its future remains uncertain.

The new rule underscores Brazil’s growing willingness to leverage technology in combating crime, raising questions about the balance between public safety funding and maintaining a national asset pool.