Brazil Passes Law Allowing Seized Crypto to be Used for Public Security

Brazil’s public security agencies have a new weapon for fighting organized crime after national legislators approved a measure allowing them to use confiscated cryptocurrency in their efforts.

On Wednesday, Brazil’s legislative branch published Law No. 15.358, establishing a legal framework for combating organized crime. The law allows authorities to prohibit transactions on crypto exchanges by treating digital assets as instruments in a crime, and confiscate crypto to be used to fund public security.

“For the purposes of forfeiture of assets, any asset that has been used to commit a crime shall be considered an instrument of the crime, even if it was not intended exclusively for that purpose,” said a translation of the law, which included:

“The forfeited assets and valuables may be used provisionally by public security agencies for police re-equipment, training, and special operations, subject to authorization from the judge overseeing the execution of the sentence.”

Notably, the law would authorize Brazil to coordinate and cooperate with international authorities for investigation and asset recovery, including in cases potentially involving digital assets. With a population of more than 213 million, many of whom use crypto, the legislation could have significant implications for the Brazilian government’s war chest.

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The signing of the law followed reports that Brazil’s Finance Minister, Dario Durigan, planned to delay talks on changing the country’s tax policy on crypto. According to reports, Durigan aimed to avoid divisive changes to tax policy, and would push discussions until after Brazil’s presidential election in October.

In 2025, the Brazilian Federal Police’s Operation Lusocoin targeted a laundering and foreign exchange evasion architecture of massive scale, according to TRM Labs. Authorities estimate that the network moved tens of billions of Brazilian reais through a web of shell companies, OTC crypto brokers, and non-custodial wallets.

Brazil is still reviewing a national crypto reserve

In contrast to countries like the US, where crypto seized as part of criminal cases could be used to bolster a national digital asset stockpile, Brazil’s law would divert the funds to public security measures like police training. However, Brazil’s government discussed a proposal to create a national Bitcoin (BTC) reserve in August 2025.

The BTC reserve bill, initially introduced in 2024, could allow Brazil to allocate up to 5% of the country’s treasury to purchase Bitcoin. In February, lawmakers reintroduced the legislation, expanding its scope to allow for the purchase of up to one million BTC. It was unclear as of March if the bill would have enough support to pass in the future.

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