Brazil Authorizes Use of Seized Crypto for Security Funds

TLDR

• Brazil enacted Law No. 15.358, allowing authorities to use seized crypto assets to fund public security operations.
• President Luiz Inácio Lula da Silva signed the law to expand asset freezing and seizure powers.
• Courts can authorize the provisional use of confiscated digital assets before final convictions.
• The law targets violent criminal groups, paramilitary organizations, and private militias.
• Authorities can suspend access to crypto exchanges and digital wallets during investigations.

Brazil has enacted a new law that redirects seized crypto assets into public security funding. President Luiz Inácio Lula da Silva signed Law No. 15.358 to expand asset seizure powers. Authorities can now freeze and use digital assets during criminal investigations.

Brazil Expands Asset Seizure Powers to Fund Security Operations

Law No. 15.358 authorizes police to freeze, block, and seize traditional and digital assets. It allows provisional use of seized crypto with judicial approval. Authorities can fund police operations, intelligence, and officer training before final convictions.

The law targets violent criminal organizations, paramilitary groups, and private militias. It broadens criminal definitions and increases penalties for territorial control and police obstruction. It also penalizes the use of encrypted messaging and privacy tools to conceal crimes.

Authorities can suspend access to crypto exchanges and digital wallets during investigations. Courts can impose permanent restrictions after convictions. The law also strengthens civil measures to seize property and liquidate illicit assets.

Brazil will improve international cooperation for asset recovery and intelligence sharing. Officials aim to track illicit proceeds across borders. The law also creates a national criminal database integrating financial structures of criminal groups.

Justice officials said the framework enhances coordination between police, prosecutors, and courts. They stated that courts will oversee provisional asset use. They added that judicial approval remains mandatory for each action.

Bitcoin Reserve Proposal and Energy Sector Developments in Brazil

Lawmakers reintroduced a bill in February 2026 to create a Strategic Sovereign Bitcoin Reserve. Federal Deputy Luiz Gastão of PSD/CE presented the proposal in Congress. The bill proposes that Brazil acquire 1 million bitcoins over five years.

The proposal would prohibit the sale of bitcoins seized by judicial authorities. It would also allow federal taxes to be paid in Bitcoin. The framework encourages public companies to participate in Bitcoin mining and custody.

The draft requires transparency and secure storage practices for national holdings. It mandates public disclosure of reserve balances. It also requires cold wallets and multisignature storage systems.

If Congress approves the bill, Brazil would join countries holding national Bitcoin reserves. El Salvador currently holds Bitcoin as a national reserve asset. Lawmakers continue to review the proposal in committee stages.

Meanwhile, Engie launched the 895-megawatt Assu Solar plant in northeast Brazil. The facility entered full commercial operation this month. However, grid operators have already restricted output during oversupply periods.

Reuters reported that Engie is studying battery storage and bitcoin mining data centers. The company aims to offset curtailment losses and improve project economics. Officials have not announced a final investment decision.

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