The U.K. government plans to enact a new bill that will give local courts and law enforcement agencies more power to freeze and confiscate crypto assets linked to crime. The Economic Crime and Corporate Transparency Bill, expected to be finalized later this year, will remove some legal hurdles and speed up the process of targeting tainted crypto in criminal cases.
Currently, U.K. authorities can only seize crypto assets in criminal proceedings if there is an arrest or conviction of the suspect. This means that criminals can potentially move their assets before the police can get court approval to freeze them.
The new bill will let courts order the confiscation of assets before arresting the suspect. However, the suspect will keep the assets until they are arrested or convicted.Â
Phil Ariss, director of U.K. public sector relations at TRM Labs, a blockchain analytics firm, said that the change will be useful in cases where the suspect is unlikely to face justice in the U.K., such as fraudsters operating from abroad.
He said:
“One area this will be used is on occasions where assets have been identified, significant links to criminality can be proven, but the subject of the investigation is unlikely to face justice in the U.K. – think of those committing fraud outside of the U.K. and targeting U.K. residents”.
Why the Bill Matters for Crypto Crime Prevention
The U.K. government has pledged to spend £100 million ($124 million) over three years to fight economic crime, which is nearly 50% more than what was spent in 2020.
The bill is part of this effort to crack down on crypto-related crimes, such as money laundering, drug trafficking, cybercrime, and terrorism.
It could also help boost the U.K.’s public purse, as the seized crypto assets could be sold and converted into fiat currency.
According to a report by Chainalysis, a blockchain intelligence company, the U.K. ranked fourth in the world in terms of crypto seizures by law enforcement agencies in 2020, with a total value of $303 million.
However, some experts warn that the bill could also drive criminals to move their assets to less regulated jurisdictions, where they can evade detection and seizure. Nick Barnard, partner at law firm Corker Binning, said:
“If the U.K. gets better at seizing crypto, they might find that the pool of available targets quickly dwindles as suspected criminals move their assets offshore to less enthusiastically policed jurisdictions.”
