Brazil Enacts Law to Fund Police With Seized Crypto

Edgen Crypto·Mar 26 2026, 16:26

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Key Takeaways

A new law in Brazil now allows authorities to seize digital assets from criminal organizations and use the funds for public security. Enacted on March 25, Law No. 15.358 aims to dismantle the financial infrastructure of organized crime by expanding judicial powers and targeting the country's growing crypto sector, where stablecoins represent about 90% of transaction volume.

New Seizure Powers: Under Law No. 15.358, Brazilian authorities can now seize crypto assets from criminal investigations and, with a judge's approval, use them to fund police operations before a final conviction.
Targeting Exchanges: Article 9 of the law grants judges the power to immediately freeze digital assets and block accounts on crypto exchanges and instant-payment systems like Pix without notifying the accused.
Focus on Stablecoins: The legislation addresses a market where stablecoins account for ~90% of transaction volume, a pattern authorities link to money laundering, including an estimated $2.4 billion laundered by the PCC crime group.

Law 15.358 Enables Pre-Conviction Asset Seizure

On March 25, Brazil enacted Law No. 15.358, a significant policy shift that empowers the state to convert seized cryptocurrencies into a funding source for public security. The legislation allows authorities to provisionally use digital assets confiscated from criminal organizations to pay for police equipment, intelligence operations, and training, contingent on judicial approval. This process can occur even before a final criminal conviction is secured, marking a decisive move to weaken criminal enterprises financially.

The law greatly expands judicial authority, enabling judges to order the freezing, blocking, or seizure of crypto assets during an investigation at the request of police or prosecutors. Critically, Article 9 permits the immediate blocking of accounts on crypto exchanges and instant-payment networks like Pix without prior notification to the suspect. This provision is designed to prevent the rapid movement of illicit funds once an investigation is underway.

New Law Confronts Brazil’s Illicit Crypto Economy

The legal framework directly targets the financial operations of powerful criminal factions like the PCC and Comando Vermelho. This legislative action is a direct response to the scale of crypto-related crime in Brazil, where stablecoins such as USDT and USDC represent approximately 90% of total transaction volume. Authorities have long viewed this dominance as a strong indicator of capital flight and money laundering.

The strategy addresses a significant national security threat, with reports indicating that groups like the PCC have laundered as much as $2.4 billion through digital asset networks. In addition to asset seizure, the law introduces harsher penalties for organized crime leaders, with prison sentences ranging from 12 to 40 years. It also defines the use of encrypted messaging or privacy tools to conceal criminal activity as an aggravating factor in sentencing.