Brazil targets crypto fraud with prison terms up to 10 years

Brazil’s Chamber of Deputies is advancing a new legal framework aimed at directly tackling electronic fraud, now explicitly including crypto assets. The influential Finance and Taxation Committee has passed Bill 5819/2025, which empowers authorities to freeze crypto wallets of suspects and sets prison sentences of up to 10 years for certain types of electronic fraud.

Judiciary gains expanded enforcement powers

According to the draft law, penalties for fraud committed via social media, phone, email, and other digital channels will be increased from the current 4–8 years to 6–10 years of imprisonment. Monetary fines are also incorporated into the proposal.

The new framework authorizes judges to impose preventive measures, allowing them to freeze both bank accounts and crypto wallets suspected of being involved in fraudulent activities. Courts will additionally have the ability to restrict access to real estate, bar suspects from contacting victims, and limit the use of social media and digital payment systems during investigations.

If a victim’s financial losses exceed 100 times Brazil’s minimum wage, or if investigators present evidence that the suspect might attempt to flee, courts will be able to order preemptive detention. Furthermore, if the crime is found to be committed as part of an organized group, the base sentence will be increased by one third.

Bill awaits further legislative hurdles

Bill 5819/2025 was introduced by Deputy Coronel Chrisostomo and reviewed by committee rapporteur Kim Kataguiri. As Brazil’s lower house, the Chamber of Deputies is responsible for the initial evaluation of federal legislative proposals.

The proposal will now be submitted to the Constitution, Justice, and Citizenship Committee for further examination. Should it receive approval there, it must then pass a plenary vote in the Chamber of Deputies, followed by consideration in the Federal Senate. The final step requires the President’s signature before the bill becomes law.

Brazil intensifies crypto crime crackdown

Brazil is addressing crypto-related offenses not only through legislation but also through extensive law enforcement operations. In September 2025, federal police launched “Operation Lusocoin,” targeting a network accused of laundering over 3 billion Brazilian reals using crypto assets, shell companies, and a proprietary token.

This operation resulted in 11 arrests and the freezing of assets belonging to 65 people and the implicated organization. The investigation was cited as evidence of Brazil’s increasingly hardline approach to financial crimes associated with digital assets.

Other notable cases have also emerged in recent years. In 2022, Brazilian federal police collaborated with US Homeland Security Investigations to raid properties linked to Francisley Valdevino da Silva. Nicknamed the “Bitcoin Sheikh,” Silva was alleged to be connected to an international fraud ring said to have collected around $800 million from investors across multiple countries.

More recently, three executives in the high-profile Braiscompany case received prison sentences totaling 170 years. Authorities reported that this group defrauded approximately 20,000 investors, causing losses of 1.1 billion reais, equivalent to roughly $190 million.

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