Brazilian President Luiz Inácio Lula da Silva has introduced a major new legislative proposal that would grant authorities the power to immediately liquidate seized cryptocurrencies, including Bitcoin, even before criminal trials are concluded.
The measure, submitted in mid-November 2025, is a key part of Lula’s “anti-gang” initiative aimed at disrupting the financial operations of powerful organized crime groups that rely heavily on digital assets to move and store illicit funds.
Key Aspects of the Proposal:
- Faster Liquidation: If approved, the bill would allow financial institutions to treat seized crypto the same way as checks, securities, and foreign exchange—meaning immediate liquidation.
- Weakening Criminal Finance: Law enforcement’s primary objective is to prevent criminal groups from profiting from the volatility of crypto while cases drag on for years, denying them the chance to reclaim assets that may have appreciated significantly.
- Parallel Regulation: This move aligns with the Central Bank of Brazil’s concurrent efforts to roll out stricter oversight, requiring capital reserves and licensed status for crypto companies.
Remaining Legal Challenge:
The proposal faces a significant legal hurdle: compensation for acquitted individuals. Given the massive volatility of digital assets, determining fair compensation for a suspect whose crypto was liquidated and subsequently acquitted could be financially and legally complex for the government.
Overall, the bill represents an attempt to directly counter the growing use of crypto by criminal organizations like the “Comando Vermelho,” forcing a debate on whether rapid liquidation is a necessary step to strengthen law enforcement or a risk that could create new financial complications for the state.
