Brazil’s crypto fraud laws moved forward after a Chamber of Deputies committee approved a proposal giving judges power to freeze cryptocurrency tied to suspected electronic fraud.
The Finance and Taxation Committee approved Bill 5819/2025, authored by Representative Coronel Chrisostomo and backed by rapporteur Kim Kataguiri. The measure seeks to update Brazil’s Penal Code and Code of Criminal Procedure as authorities respond to fraud carried out through digital channels.
The proposal would increase the maximum prison sentence for electronic fraud from eight years to 10 years. It would also move the sentencing range from four to eight years to six to 10 years when fraud is committed through social media, telephone, email, or other digital means. Fines would also apply under the bill.
Judges May Freeze Crypto Wallets
The bill would allow courts to order the freezing of bank accounts and cryptocurrency wallets belonging to suspects. These measures would be available as precautionary tools during investigations into electronic fraud.
Judges could also block access to real estate, restrict contact with victims, and limit the suspect’s use of social media. The same proposal would let courts restrict access to digital payment systems when needed during a case.
Preventive detention would be allowed when losses exceed 100 minimum wages. Courts could also order detention when investigators show that a suspect may flee. If the fraud involves a structured criminal organization, the sentence would rise by one-third.
Brazil Links Crypto to Fraud Enforcement
The committee’s approval comes as Brazil continues to pursue cases involving crypto-linked financial crime. In September 2025, the Federal Police carried out Operation Lusocoin, which targeted a network accused of laundering more than 3 billion reais, or about $540 million, through cryptocurrency, shell companies, and a proprietary token.
That operation led to 11 arrests. Authorities also froze assets connected to 65 individuals and entities.
Brazilian and U.S. authorities had earlier pursued another major case in 2022. The Brazilian Federal Police and U.S. Homeland Security Investigations raided locations linked to Francisley Valdevino da Silva, known as the “Bitcoin Sheik.” He was accused of operating a transnational cryptocurrency fraud network that allegedly stole nearly $800 million from investors in several countries.
Bill Still Faces More Votes
Brazil has also seen court action against the Braiscompany Ponzi scheme. Three operators received combined sentences of 170 years after about 20,000 investors were defrauded of approximately 1.1 billion reais, or $190 million.
Bill 5819/2025 now moves to the Constitution, Justice, and Citizenship Committee. If approved there, it must still pass the full Chamber of Deputies and the Senate. The measure would then require presidential approval before becoming law. Until then, the proposed powers cannot be treated as active criminal law.
