Brazil’s New Anti-Gang Law Lets Authorities Liquidate Seized Crypto to Fund Police Operations

Brazilian President Luiz Inácio Lula da Silva signed Law No. 15,358 on March 25, establishing what the government calls the Legal Framework for Combating Organized Crime. The legislation, also known as the Raul Jungmann Law, gives judges the authority to freeze, seize, and forfeit crypto and other digital assets tied to criminal organizations — and funnel the proceeds into public security funds.

The law is notable for explicitly incorporating digital assets into Brazil’s anti-crime toolkit. Article 9 of the legislation authorizes judges to order the “seizure, attachment, blocking or freezing of movable and immovable property, rights and assets, including digital or virtual assets” during investigations, as well as prohibit operations on crypto exchanges and block access to digital wallets — all without prior notice to the accused.

Crucially, the measures don’t require a conviction. Judges can authorize the provisional use or early sale of seized cryptoassets, with proceeds directed to state or federal security funds to finance police operations, intelligence work, and officer training. In cases where illicit origins are clear, an “extraordinary forfeiture” process allows assets to be declared lost even without a criminal judgment.

The bill was first introduced in November, shortly after authorities cracked down on an illegal Bitcoin mining operation. It was drafted to target the financial infrastructure of gangs like Comando Vermelho and the PCC.

The law also introduces two new criminal categories — “structured social domination” and “aiding structured social domination” — carrying sentences of 12 to 40 years. Leaders of ultraviolent criminal organizations face mandatory imprisonment in maximum-security federal facilities, and the use of encrypted messaging apps or privacy tools to conceal criminal activity is designated as an aggravating factor that increases sentences.

The legislation mandates the creation of a national criminal database that maps the financial structures of known criminal organizations, designed to improve coordination between police, prosecutors, and the judiciary across Brazil’s states. The law also enables international cooperation for asset recovery and intelligence sharing, allowing Brazilian agencies to work with foreign counterparts to trace and recover illicit funds.

Upon final conviction, individuals permanently lose access to the formal financial and crypto systems and are barred from contracting with the government, participating in public tenders, or receiving fiscal incentives for 12 to 15 years.

The law stands in pointed contrast to a separate legislative effort introduced in February by Federal Deputy Luiz Gastão. His bill, an expanded version of PL 4501/2024, proposes a Strategic Sovereign Bitcoin Reserve, known as RESBit, to gradually acquire up to 1 million BTC over 5 years. That proposal would explicitly prohibit the sale of judicially seized Bitcoin, retaining confiscated assets within the reserve rather than liquidating them.

Law No. 15,358 takes the opposite approach: it treats seized crypto not as a reserve asset but as a resource to be converted and spent on law enforcement. Whether the two frameworks can coexist — or whether the RESBit bill advances at all — remains an open question.

This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.