Brazil has passed a sweeping anti-gang law that allows authorities to seize and liquidate cryptocurrencies linked to criminal activity with the proceeds redirected to fund police operations.

Signed into law by President Luiz Inácio Lula da Silva, the Legal Framework for Combating Organized Crime legislation, also know as the Raul Jungmann Law, expands judicial powers to freeze, confiscate, and even sell digital assets during investigations – not just after a conviction.

Courts can now authorize the early liquidation of seized crypto to avoid losses from market volatility and quickly channel funds into public security efforts.

Under the new framework, confiscated assets – including cryptocurrencies, stocks, and luxury goods – can be permanently forfeited and converted into cash to support police equipment, training, intelligence work, and special operations.

In some cases, authorities can provisionally use seized assets before a trial concludes, subject to judicial approval.

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— Dr.Philippe Vynckier, CISSP – Influencer (@PVynckier) March 15, 2026

The law specifically targets organized crime groups such as militias and drug trafficking networks, while also giving authorities the ability to block access to crypto wallets, exchanges, and financial platforms during investigations.

The law introduces 2 criminial categories:

  • Structured social domination

  • Aiding structured social domination

which:

  • carry sentences of 12-40 years,

  • mandatory imprisonment in maximum-security federal facilities for ultraviolent criminal organizations, and

  • the use of encrypted messaging apps or privacy tools to conceal criminal activity is designated as an aggravating factor that increases sentences.

The new legislation also introduces financial incentives for cooperation: individuals who help authorities trace illicit assets can receive up to 5% of the recovered value once those assets are liquidated.

On top of that, the legislation mandates:

  • Creation of a national criminal database mapping financial structures of known criminal elements to improve police, prosecution, and judiciary coordination across Brazil.

  • International cooperation for asset recovery and intelligence to trace, trace, and recover illicit funds, and

  • Permanent barring of access of individuals from the formal financial and crypto systems including government contracting, participation in pubic tenders, and receiving fiscal incentives for 12-15 years.

More broadly, the move reflects a shift in how Brazil treats crypto, not just as an asset to regulate, but as one that can be actively repurposed to strengthen law enforcement and disrupt criminal financing networks.

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