New UK Law Empowers Authorities to Seize, Freeze, Destroy Crypto
On April 26, newly enacted laws that empower law enforcement agencies in the United Kingdom to “seize, freeze and destroy” crypto assets came into effect.
This legislative action directly responds to the escalating trend of illicit cryptocurrency transactions within the UK.
UK Can Seize Crypto Without Arrest
In recent years, organized criminal entities such as drug traffickers and terrorists have increasingly exploited cryptocurrencies for money laundering purposes. The National Crime Agency’s National Assessment reported a surge in illicit crypto transactions in the UK to £1.2 billion in 2021.
To counter this trend, the Home Office has announced amendments to regulations. The new regulations empower law enforcement agencies to seize cryptocurrency holdings without the necessity of making an arrest first. This change follows the passage of a crime bill by the UK Parliament last year, which expedited the crypto seizure process.
“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,” Home Secretary James Cleverly said.
The new guidelines grant authorities the power to confiscate items like written passwords or memory sticks that could assist in criminal inquiries and to transfer illicit cryptos to government-controlled wallets, effectively cutting off criminal access.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
Furthermore, authorities can now destroy specific digital assets, notably privacy coins. The authorities argued that these assets offer heightened anonymity and are frequently utilized in illicit transactions. This measure serves to prevent these assets from re-entering circulation.
Moreover, the legislation incorporates provisions allowing victims of crypto-related crimes to petition for the release of their funds.
“These new powers are very welcome and will enhance law enforcement’s ability to restrain, recover and destroy crypto assets if required…They will enable a more effective pursuit of the criminals and ultimately deny them the financial gain they crave,” Adrian Searle, the Director of the National Economic Crime Centre, added.
Recent joint operations by the NCA and the United States Drug Enforcement Administration resulted in the dismantling of a multi-million-dollar drug network, with $150 million in cash and cryptocurrencies seized. Notable successes include prosecuting individuals engaged in crypto-facilitated counterfeit drug sales on the dark web and value-added tax (VAT) fraud involving non-fungible tokens (NFTs).
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