Brazil’s Superior Court of Justice has ruled that judges can now authorize the seizure of cryptocurrency assets from individuals who are behind on their debts—a move that solidifies the legal standing of digital assets in the country’s financial ecosystem.
The landmark decision, made unanimously by the court’s Third Panel, allows judges to notify cryptocurrency brokers of their intent to access and seize digital holdings to repay outstanding debts. According to a translated court memo, “Although they are not legal tender, crypto assets can be used as a form of payment and as a store of value.”
This ruling aligns cryptocurrencies with traditional financial assets such as bank funds, which Brazilian judges have long had the authority to freeze or withdraw without prior notice to the debtor. With this new interpretation, crypto assets are now subject to the same enforcement actions under existing laws.
Minister Ricardo Villas Bôas Cueva, a member of the five-judge panel, acknowledged that while Brazil lacks full regulation of cryptocurrencies, the legal landscape is evolving. Some legislative proposals already define crypto as “a digital representation of value.”
The court’s decision comes at a time when crypto adoption is booming in Brazil. The country ranks second in Latin America in terms of “crypto value received,” according to an October report by Chainalysis. Binance, one of the world’s largest crypto exchanges, recently expanded its presence in Brazil after acquiring a São Paulo-based firm.
Despite positive developments, Brazil’s regulatory path remains complex. The central bank’s proposal in December to ban stablecoin transactions via self-custodial wallets sparked criticism and concerns over enforceability. Critics argue such restrictions may only impact centralized platforms, leaving decentralized networks largely unaffected.
As Brazil moves closer to a full regulatory framework—expected by mid-year—this court ruling signals a major step in legitimizing digital currencies within the country’s legal and financial systems.
