Brazil has enacted a new “Anti-Gang Law” granting authorities broad powers to seize and potentially sell digital assets like Bitcoin from organized crime groups. Signed by President Luiz Inácio Lula da Silva, the legislation aims to financially strangle criminal enterprises, with proceeds from sold assets funding public security. The move follows a broader government crackdown on illegal cryptocurrency activities within the country.
Brazilian President Luiz Inácio Lula da Silva signed the so-called “Anti-Gang Law” on Tuesday, creating harsher penalties for crime leaders and providing tools for authorities to achieve *”financial, logistical, and material strangulation”* of criminal groups. The law allows judges to order the seizure, blocking, or freezing of assets, explicitly including digital or virtual assets, when sufficient evidence of a serious crime exists.
Brazil’s Minister of Justice and Public Security Wellington Lima stated the law represents progress by “incorporating mechanisms for financial strangulation and strengthening the state’s capacity to respond to the growing complexity of these criminal structures.” Judges may also authorize the early sale of seized assets in certain cases.
Proceeds from any sales will be directed to public security funds. Custody of seized assets generally falls to public authorities unless a judge determines official custody is materially impossible or technically inadequate.
The government introduced this bill to congress in November, following proposals to crack down on crime and illegal Bitcoin or stablecoin use. This legislative action came shortly after authorities clamped down on an illegal Bitcoin mining operation in September.
The law highlights ongoing challenges for law enforcement globally in handling seized crypto assets. Authorities in South Korea, for instance, previously lost access to $1.4 million in Bitcoin by not following custody guidelines.
