Crypto Global Updates: Argentina Targets Libra as Brazil Declares Crypto Seizable

This week’s Insights from Latin America (LATAM) reveals a region in regulatory flux. Argentina’s Congress is preparing to probe its government’s alleged ties to the failed Libra token, while Brazil’s highest court ruled that cryptocurrencies can now be legally seized for debt settlement. Meanwhile, Brazil’s Drex CBDC pilot has stalled due to unresolved privacy concerns. These developments signal an evolving but increasingly controlled Latin American crypto environment.

Argentina Launches Congressional Probe into Libra Token Debacle

In a politically charged move, the Argentine lower chamber of Congress voted to create a commission investigating government officials’ involvement in the controversial Libra token, also known as La Libertad Avanza. The initiative passed with 128 votes in favor, primarily from left-leaning blocs, while 93 opposed and 7 abstained.

The commission, composed of 24 representatives, will begin work on April 23 and has a 90-day mandate to determine whether President Javier Milei, his sister Karina Milei, and other high-ranking officials played a role in the token’s launch and collapse. The move is seen as a “hard setback” for the ruling party and may have major implications for Argentina’s crypto regulatory future.

Landmark Ruling: Crypto Can Be Seized for Debt in Brazil

In a historic legal decision, the National High Court of Brazil (STJ) has ruled that cryptocurrency assets can be legally seized to cover outstanding debts. The judgment emphasizes that, despite not being legal tender, cryptocurrencies are taxable assets and recognized as valid means of payment and stores of value.

The court based its ruling on existing requirements for crypto transactions to be reported to Brazil’s Federal Revenue Service, equating crypto to other seizable financial instruments. This sets a precedent, empowering creditors and legal authorities to access digital assets for debt recovery, especially from individuals evading traditional financial systems.

Brazil’s Drex CBDC Pilot Stalls Over Privacy Concerns

The Brazilian Central Bank’s digital currency pilot, Drex, has hit a major snag. The initiative is facing developmental delays as tech partners Microsoft and EY scale back their support due to unresolved privacy framework issues. According to Valor Economico, the Drex pilot’s second phase closed without accepting any proposed privacy solutions, all of which failed to meet regulatory standards for transaction confidentiality and compliance oversight.

 The central bank’s insistence on a dual approach—preserving user privacy while enabling transaction tracing—has proven difficult to satisfy, leading to a pause in progress. While Brazil’s CBDC ambitions remain strong, the Drex project’s slowdown may indicate deeper systemic challenges in aligning decentralized architecture with central regulatory demands.

Conclusion: Latin America Moves to Rein In Crypto Wild West

As Argentina investigates potential crypto corruption and Brazil legitimizes asset seizures, the message is clear: Latin America’s crypto space is entering a new era of accountability. Coupled with Drex’s stalled development, these events reflect a region attempting to balance innovation with regulation.

With rising crypto adoption across Latin America, governments are no longer passive observers. Whether it’s probing leadership over token controversies or reinforcing legal frameworks around digital assets, Latin America’s crypto future looks increasingly regulated and combative.