Brazil has passed a new legislation empowering law enforcement authorities to take a stricter approach against curbing organized crime. As part of this law, the Brazilian government has allowed law enforcement agencies to crack down on crypto criminals and seize assets linked to illicit activities.
Dubbed the “Anti-Gang Law”, the legislation was signed this week by Brazilian President Luiz Inácio Lula da Silva.
Under the law, courts will be able to order seizure and freezing of assets and properties including virtual assets if the crime perpetuated is officially recognized as illegal in the country.
Once seized, these assets will be placed under the joint supervision of National Council of Justice (CNJ) and the National Council of the Public Prosecutor’s Office (CNMP).
The agencies can then choose to request more information on these assets and initiate thorough audits. The agencies have also been tasked with the responsibility of deciding how to control these assets and decide a “proper use of the recovered resources”.
The authorities could also decided to conduct an early sale of these assets at their discretion.
Incase the defendants are acquitted after investigation, the seized assets will be returned within three business days.
The development comes at a time when Brazil is going bullish on regulating the $2.45 trillion worth of the crypto sector.
Crypto transactions eliminate middlemen like banks and brokers to facilitate peer-to-peer transfers. These transactions are largely private and difficult to trace. For ages, governments around the world have remained skeptical to include crypto in their existing financial systems citing risks of these assets being exploited for illicit activities like money laundering and terror financing.
Brazil itself is discussing levying taxes on cross-border crypto transactions to help the Brazilian authorities keep a trail of crypto payments to track potentially suspicious activities.
The Latin American country has also tightened licensing and operational mandates for local crypto firms. Digital assets service providers have been mandated to secure an official authorization from the Central Bank of Brazil upon justifying lawful origin, service viability, financial capacity, and technical tenacity.
In recent months, crypto majors like Binance, Chainlink, and FalconX have established their presences in the Brazilian market.
All crypto firms in the country have to put strong internal security measures in place to detect possible crimes and provide details of suspicious activities to the relevant authorities.
The BCB has capped crypto transactions to unauthorized entities at $100,000 to curb possible scams and frauds.