The Brazilian government proposed a law to allow the sale of bitcoin and other cryptocurrencies seized during criminal investigations at a time when the nation appears to be cracking 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 the outcome of the trial, in the same way that foreign currencies, checks and securities are treated. It is unclear what happens if the suspects are later acquitted.
Officials said the measure aims to hit gangs where it hurts most: their wallets, and is part of a broader “anti-faction bill” that amends legislation on criminal organizations and Brazil’s code of criminal procedure. It is aimed at the financial infrastructure of gangs such as Comando Vermelho, one of the most powerful criminal factions in the country.
The timing of the proposal is notable. It comes days after a major police operation in Rio’s favelas left 121 people dead, most of them suspected gang members, in what is now the country’s deadliest police raid.
Authorities said the raid targeted leaders of the Red Command and involved more than 2,500 officers.
The initiative to liquidate seized crypto assets is being developed alongside a major regulatory reform by Brazil’s central bank. The central bank published new rules requiring cryptocurrency companies to be licensed and maintain capital reserves ranging between $10.8 million ($2 million) and 37.2 million reais, depending on their activities.
The rules, which will go into effect in February, classify a wide range of crypto activities under Brazil’s capital and foreign exchange laws.
They require companies to report international transactions, including stablecoin payments and transfers to self-custody wallets, and place a $100,000 limit on each transaction involving foreign currency.
The anti-faction bill is under urgent consideration in Congress and must be voted on by December 18.
