- The UK has just granted its law enforcement new powers to seize, freeze, and destroy crypto assets used by criminals
- The new law which took effect today, will enable UK law enforcement to reinforce its crackdown on illicit finance and potentially restore stolen crypto assets to victims
The UK government today granted greater powers to its police and National Crime Agency (NCA) to seize, freeze, and destroy crypto assets linked to criminal activity. The law, which took effect today, reinforces UK law enforcement’s efforts in effectively investigating, seizing, and recovering illicit crypto assets.
“Criminals should never be able to benefit from breaking the law which is why we are making it much easier for law enforcement to stay on top of a new and developing threat,” said Home Secretary James Cleverly.
“These reforms will also enhance our national security. Terrorist organisations like Daesh are known to raise funds through crypto transactions and these updated powers will enable our agencies to more easily strip them of their assets.”
The UK government’s Economic Crime Plan for 2023 – 2026 revealed “growing criminal acquisition and abuse of cryptoassets” connected to a wide range of “predicate crimes”, money laundering, and other forms of organized criminal activity.
According to the Plan, the UK National Crime Agency estimated that in 2021, the UK hosted illicit crypto asset transactions worth over £1.24 billion, equating to about 1 percent of the total transaction value that year.
This fast-advancing wave of criminal activity using cryptoassets has driven the government to revise and update its crime and terror legislation to make it more convenient for law enforcement to take on illicit elements and recover their assets.
Consequently, the UK Police will no longer need to make an arrest before seizing illicit crypto assets from a suspect. That way, the police can take possession of assets linked to criminal activity regardless of whether the criminals involved are based overseas or trying to hide their identity through other means.
In addition, the police can now seize items that could potentially provide valuable information for an investigation, including “written passwords or memory sticks.” The police now have the power to transfer illicit crypto assets to a law enforcement-owned electronic wallet where criminals can no longer access them.
Under the updated crime and terror legislation, UK law enforcement can now “destroy a crypto asset” if releasing it back into circulation “is not conducive to public good.” Such destructions will target crypto assets like privacy coins which offer high-level anonymity and are exploited by criminals for illicit finance.
Reacting to the new legislation, Adrian Searle, Director of the National Economic Crime Centre, said “These new powers are very welcome and will enhance law enforcement’s ability to restrain, recover, and destroy crypto assets if required.”
This enhanced ability of UK law enforcement agencies will also pave the way for victims of fraudulent crypto schemes to recover their funds as they can lay claims to their money through the relevant agency and have it released to them.