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Brazil Passes Law Turning Seized Crypto into Public-Security War Chest

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Brazil Passes Law Turning Seized Crypto into Public-Security War Chest

Brazil has enacted a landmark law that allows authorities to channel crypto seized from criminal organizations directly into public security initiatives, marking a major step in the country’s crackdown on organized crime.

Signed by President Luiz Inácio Lula da Silva, Law No. 15.358 equips law enforcement with unprecedented powers to freeze, block, and seize both traditional and digital assets, including crypto, during investigations. 

The legislation also permits the provisional use of seized cryptoassets, with judicial approval, to fund police operations, intelligence work, officer training, and other public security efforts—even before final convictions.

The law specifically targets ultraviolent criminal organizations, paramilitary groups, and private militias, broadening the definition of crimes and significantly increasing penalties for acts such as controlling territories, obstructing police, or using encrypted messaging apps and privacy tools to conceal illicit activity.

Authorities can now suspend access to exchanges, digital wallets, and online platforms during investigations, with permanent restrictions applied upon conviction.

The legislation also facilitates international cooperation for asset recovery and intelligence sharing, aiming to track and recover illicit proceeds across borders.

The law further strengthens civil measures, allowing courts to seize property, block funds, and liquidate assets connected to criminal activity. 

It establishes a national criminal database that integrates the financial structures of known criminal groups, improving coordination between police, prosecutors, and the judiciary.

Brazil’s attempt at a bitcoin reserve 

Back in February 2026, Brazilian lawmakers reintroduced a bill proposing the creation of a Strategic Sovereign Bitcoin Reserve (RESBit) to gradually acquire one million bitcoins over five years. 

The bill, presented by Federal Deputy Luiz Gastão (PSD/CE), outlines a comprehensive framework to integrate Bitcoin into the country’s financial strategy and diversify national reserves.

The legislation would prohibit selling bitcoins seized by judicial authorities, allow federal taxes to be collected in Bitcoin, and encourage public companies to participate in Bitcoin mining and storage. 

RESBit would emphasize transparency and security, requiring public disclosure of holdings and use of cold wallets, multisignature wallets, and other recognized storage methods. 

If approved, Brazil would join a small group of countries holding national Bitcoin reserves, following examples like El Salvador and proposals in the United States.

Also, French utility giant Engie is considering adding battery storage or bitcoin mining data centers at its newly launched 895-MW Assu Sol solar plant in Brazil to offset curtailment losses and boost project economics, Reuters reports.

Despite entering full commercial operation this month, the northeast Brazil facility has already faced grid-imposed restrictions that limit output when supply exceeds demand.

This post Brazil Passes Law Turning Seized Crypto into Public-Security War Chest first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

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