Brazil has granted its public security agencies a new tool in the fight against organized crime, after national legislators approved legislation permitting the use of confiscated cryptocurrency to fund law enforcement efforts. The measure was published on Wednesday as Law No. 15.358, establishing a formal legal framework for combating organized crime in the country. The law enables authorities to treat digital assets as instruments of crime and block transactions on crypto exchanges accordingly.
Under the legislation, any asset used in the commission of a crime qualifies as an instrument of that crime, regardless of whether it was intended exclusively for criminal purposes. This broad definition gives prosecutors and law enforcement considerable latitude when pursuing digital asset seizures. The law also authorizes Brazil to coordinate with international authorities on investigations and asset recovery, including cases involving digital assets.
With a population exceeding 213 million — many of whom use cryptocurrency — the legislation could meaningfully expand the government’s resources for combating crime. Confiscated funds would be directed toward public security measures such as police training, distinguishing Brazil’s approach from countries like the United States, where seized crypto may contribute to a national digital asset stockpile. The scope of the problem is significant: in 2025, the Brazilian Federal Police‘s Operation Lusocoin targeted a large-scale money laundering and foreign exchange evasion network estimated to have moved tens of billions of Brazilian reais through shell companies, over-the-counter crypto brokers, and non-custodial wallets, according to TRM Labs.
The signing of the law came alongside reports that Brazil’s Finance Minister Dario Durigan planned to delay discussions on revising the country’s crypto tax policy. According to those reports, Durigan sought to avoid contentious tax changes and intended to postpone the debate until after Brazil’s presidential election in October. The decision suggests the government is proceeding cautiously on broader crypto regulation even as it moves forward on enforcement measures.
Separately, Brazil’s government has been weighing a proposal to establish a national Bitcoin (BTC) reserve. The idea was initially introduced in 2024 and discussed again in August 2025. In February, lawmakers reintroduced the bill with an expanded scope, proposing that Brazil be permitted to allocate up to 5% of its treasury toward Bitcoin purchases and potentially acquire up to one million BTC. As of March, it remained uncertain whether the bill had sufficient legislative support to pass.
The dual trajectory — enforcing crypto seizures for public security while simultaneously debating a national Bitcoin reserve — reflects the complexity of Brazil’s evolving relationship with digital assets. Authorities are working to curb criminal exploitation of crypto networks while some legislators push for the government to hold digital assets as a strategic reserve. How these parallel policy tracks develop will likely depend in part on the outcome of the October presidential election and the broader political climate surrounding financial regulation.
Originally reported by CoinTelegraph.
