New Measures to Confiscate Criminal Crypto Assets Implemented in the UK

In a significant development, greater powers for the National Crime Agency and police to seize, freeze, and destroy crypto assets used by criminals have come into force today.

This move marks a crucial step in combating the illicit use of cryptocurrency for criminal activities and upholding the financial system's integrity.

Organised criminals, including drug dealers, fraudsters, and terrorists, have increasingly turned to crypto assets to launder the proceeds of crime and raise money.

The National Crime Agency’s National Assessment Centre estimates that illicit crypto transactions linked to the UK reached at least £12 billion in 2021, highlighting the scale of the issue.

The government has updated proceeds of crime and terror legislation to address this emerging threat, making it easier for UK law enforcement to investigate, seize, and recover illicit crypto assets effectively.

New powers to seize cryptoassets used by criminals go live

Greater powers for the National Crime Agency and police to seize, freeze and destroy cryptoassets used by criminals have come into force today.

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The reforms include empowering law enforcement to seize crypto from suspects without making an arrest, enabling the seizure of items that could aid investigations, and allowing officers to transfer illicit crypto assets into an electronic wallet controlled by law enforcement.

Additionally, UK law enforcement will have the authority to destroy a crypto asset if returning it to circulation is not conducive to the public good. These measures aim to prevent criminals from undermining the legitimate use of crypto while supporting its potential as a driver of economic growth.

Home Secretary James Cleverly emphasised the importance of these measures, stating:

Furthermore, Security Minister Tom Tugendhat highlighted the impact of these reforms on national security, particularly in disrupting the funding activities of terrorist organisations such as Daesh.

Recent successful operations underscore the significance of these new powers. In one instance, the National Crime Agency collaborated with the United States Drug Enforcement Administration to investigate a multi-million drug enterprise, resulting in the seizure of $150 million in cash and crypto.

Additionally, HM Revenue and Customs (HMRC) seized three non-fungible tokens (NFTs) as part of an investigation into VAT fraud, leading to the arrest of three individuals suspected of attempting to defraud the agency of £1.4 million.

Adrian Searle, Director of the National Economic Crime Centre, highlighted the increasing use of crypto assets by criminals to conceal and move the proceeds of crime, emphasising the need to combat this trend effectively.

Adrian Foster, Chief Crown Prosecutor, echoed this sentiment, emphasising the importance of these powers in restraining, freezing, or eliminating crypto assets from illegal enterprises, ultimately denying criminals the financial gain they seek.

These developments represent a crucial step forward in the fight against financial crime and the misuse of cryptocurrency for illicit purposes.

By equipping law enforcement with enhanced powers to tackle crypto-related criminal activities, the UK is taking proactive measures to safeguard its financial system and protect the public from the detrimental effects of financial crime.