Brazil Lets Police Use Seized Crypto Before Trial
Brazil's new anti-gang law signed by President Luiz Inácio Lula da Silva allows police to use seized crypto assets for equipment and operations before conviction is finalized, shifting focus from asset forfeiture to direct law enforcement funding.
Key Takeaway
Brazil lets police spend seized crypto pre-trial — a shift from asset forfeiture to direct law enforcement funding.
President Luiz Inácio Lula da Silva signed a law that lets Brazilian public security agencies use seized crypto assets for police equipment, training, and operations before a conviction is finalized. The law targets organized crime groups like Comando Vermelho and PCC.
The bill passed with 370 votes in favor and 110 against after three weeks of negotiations. Far-right rapporteur Guilherme Derrite, a former military police captain, extensively amended the original proposal and transformed it into what critics call a more repressive measure that toughens sentences and increases local police power.
Under the new law, seized assets can be provisionally used by public security agencies for police re-equipment, training, and special operations upon authorization of the enforcement judge. Informants who help authorities seize gang assets can receive rewards of up to 5% of the liquidated value.
The legislation came after a deadly police operation on October 28, 2025 that killed at least 121 people during a raid targeting Comando Vermelho in Rio de Janeiro. That operation involved 2,500 civil and military police officers in what became the most violent police action in Brazilian history.
Brazil's original intent was to modernize federal investigative tools and confiscate assets from companies used for criminal purposes. The final version shifted that focus toward a revenue-generating mechanism for security forces, with Brazil's Supreme Federal Court separately reviewing a ban on crypto use in election campaigns as of March 30, 2026.
This article was written based on reporting from Dlnews.
