New UK Bill to Give Authorities Powers to Freeze and Confiscate Crypto Assets Tied to Crime
A new bill in the UK is set to give local authorities the power to freeze and confiscate cryptocurrency assets linked to criminal activity. The bill, known as the Economic Crime and Corporate Transparency Bill, aims to prevent the movement of tainted assets before they can be seized in criminal cases. It is also expected to contribute millions of pounds to public funding.
The bill, which is set to be enacted later this year, will give local courts and law enforcement agencies new powers to freeze cryptocurrency that they believe has been used for money laundering, drug trafficking, cybercrime, and terrorism. Currently, authorities can only seize tainted crypto assets in criminal proceedings if there has been an arrest or conviction. This requirement can create delays and allow criminals to move their assets before they can be frozen. The new bill removes the arrest requirement and allows courts to order the confiscation of assets before an arrest is made.
The provisions in the bill will allow crypto assets linked to criminal activities to be seized and recovered under the Proceeds of Crime Act 2002. While assets can be frozen to prevent movement, they cannot be technically seized from suspects until an arrest or conviction has been made. This change is seen as a positive development, especially in cases where the subject of the investigation is unlikely to face justice in the UK.
The bill also introduces new civil forfeiture powers, which will allow crypto assets linked to crime to be seized regardless of whether a person is convicted of criminal offenses. This means that funds can be seized through court proceedings. The government has stated that this will help mitigate the risk posed by those who cannot be prosecuted but use their funds for criminal or terrorist purposes.
The ability to freeze crypto assets without waiting for an arrest can significantly reduce delays in enforcement work and prevent funds from being moved. Time is of the essence in cases involving cryptocurrency, as delays can result in the loss of assets. The UK has already seized millions of pounds worth of crypto, and the new powers under the bill are expected to improve these numbers.
Data from the National Crime Agency estimates that illicit crypto transactions linked to the UK were around £1.24 billion ($1.53 billion) in 2021. The successful seizure and recovery of crypto assets by law enforcement are likely to contribute to funding crime-fighting efforts. The funds seized will either go to the law enforcement agency that seized the assets or be used to fund economic crime work. The UK government has allocated £100 million ($124 million) to fight economic crime as part of a three-year plan. However, more funding may be needed to develop a robust system to combat financial crime.
While the new seizure powers are seen as a positive step, there is a concern that suspected criminals may move their assets offshore to jurisdictions with less stringent regulations. This could limit the pool of available targets for seizure. Nonetheless, the bill is expected to enhance the UK’s ability to pursue and recover millions of pounds in proceeds from criminal activity.
Overall, the Economic Crime and Corporate Transparency Bill is set to strengthen the UK’s efforts to combat crypto-related crime. By providing authorities with the power to freeze and confiscate crypto assets, the bill aims to prevent the movement of tainted funds and contribute to public funding for crime-fighting initiatives.