Brazil Proposes Selling Seized Bitcoin to Undercut Organized Crime Networks

The Brazilian government proposed a law to allow the sale of bitcoin BTC$89,675.56 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 trial outcomes, just as foreign currencies, checks and securities are treated. What happens if suspects are later acquitted isn’t 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 amends legislation on criminal organizations and Brazil’s code of criminal procedure. It is aimed at the financial infrastructure of gangs like Comando Vermelho, one of the country's most powerful criminal factions,

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 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 to hold 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 firms to report international transactions, including stablecoin payments and transfers to self-custody wallets, and place a $100,000 cap on each transaction involving foreign exchange.

The anti-faction bill is under urgent consideration in Congress and must be voted on by Dec. 18.