- Enhanced measures for UK law enforcement to seize cryptocurrency assets in criminal cases are set to be implemented on April 26
- The provisions include a civil recovery regime for crypto and asset confiscation orders, granting authorities the power to seize crypto-related items
- This change in the law allows UK authorities to confiscate cryptocurrency holdings of suspected wrongdoers before arrest, raising concerns among freedom and privacy activists.
Enhanced measures for UK law enforcement to seize cryptocurrency assets in crime cases are set to be implemented on April 26. This follows the approval of secondary legislation last week, stemming from the 2023 Economic Crime and Corporate Transparency Act, the provisions of which include a civil recovery regime for crypto and asset confiscation orders, granting authorities power to seize crypto-related items facilitating the seizure of any crypto asset. The change in the law will give UK authorities the freedom to confiscate cryptocurrency holdings of anyone they suspect of criminal wrongdoing, a move that concerns freedom and privacy activists.
No Arrest Needed Before Seizure
The Economic Crime and Corporate Transparency Bill aims to equip local courts and law enforcement with augmented powers to freeze crypto assets suspected of involvement in money laundering, drug trafficking, cybercrime, and terrorism. This initiative anticipates faster asset freezes and potentially increased contributions to public funds. However, unlike current procedures mandating an arrest or conviction before seizing tainted crypto assets, the bill removes this prerequisite, allowing courts to preemptively order asset confiscation, even before an arrest is made.
The bill has been making steady progress towards becoming law since it was tabled last year, with changes being made during its legislative journey to ensure that the measures encompass cases involving terrorism. Additional provisions were also included to aid authorities in confiscating assets that could help identify cryptocurrencies associated with criminal behavior.
The impetus behind these new guidelines, which diverge from traditional financial law enforcement norms, is underscored by data from the National Crime Agency, revealing that illicit crypto transactions linked to the UK amounted to approximately £1.24 billion in 2021. The bill seeks to empower authorities to seize crypto assets tied to criminal activity without necessitating a conviction, particularly addressing cases where prosecution isn’t feasible.
Measure Would Bring Crypto In Line With Bank Account Seizures
The measures are geared towards streamlining enforcement efforts and thwarting asset transfers that could obscure illicitly obtained funds, but it has raised concerns about the potential infringement of innocent parties’ rights as there is a risk of assets being seized without due process.
Such moves wouldn’t be without precedent, however: UK bank accounts can be frozen prior to arrest as part of an ongoing investigation into criminal activities, such as money laundering or fraud, to prevent the suspect from accessing funds that could be linked to illegal activities. However, freezing a bank account typically requires authorization from a court or regulatory authority, and it is subject to legal procedures and safeguards to protect the rights of the individual involved.
