The Brazilian government proposed a law allowing the sale of bitcoin and other cryptocurrencies seized during criminal investigations at a time when the nation looks to crack down on organized crime.
Bill 5.582/2025, sent to Congress by President Luiz Inácio Lula da Silva, would authorize financial institutions to liquidate cryptocurrencies even before trial results, just as foreign currency, checks and securities are processed. What happens if suspects are later acquitted is not clear.
Officials said the measure is intended to hit gangs where it hurts: their wallets, and is part of a broader “anti-faction bill” that changes laws on criminal organizations and Brazil’s criminal justice system. It targets the financial infrastructure of gangs such as Comando Vermelho, one of the country’s most powerful criminal factions,
The timing of the proposal is noteworthy. It comes days after a major police operation in Rio’s favelas left behind 121 people, most of them alleged gang members, in what is now the country’s deadliest police raid.
Authorities said the raid targeted leaders of Comando Vermelho and involved more than 2,500 officers.
The push to liquidate seized crypto assets is unfolding alongside a major regulatory overhaul by Brazil’s central bank. The central bank released new rules requiring crypto companies to be licensed and have capital reserves ranging from 10.8 million ($2 million) to 37.2 million reais, depending on their activities.
The rules, which take effect in February, classify a wide range of crypto activities under Brazil’s foreign exchange and capital markets laws.
They require companies to report international transactions, including stablecoin payments and transfers to self-custodial wallets and place a $100,000 cap on each transaction involving foreign currency.
The Anti-Faction Act is under urgent consideration in Congress and must be voted on before December 18.
