The UK government has granted new powers to the National Crime Agency (NCA) and police forces, effective today, to seize, freeze, and destroy cryptoassets involved in criminal activities, Irish Legal News has reported.
This regulatory update addresses the increasing exploitation of cryptocurrencies by criminals, including drug traffickers, fraudsters, and terrorists for money laundering and fundraising purposes.
According to estimates from the National Assessment Centre of the NCA, illicit transactions involving cryptoassets exceeded £1.2 billion in 2021.
In response, the UK has streamlined its proceeds of crime and terror legislation, enabling more effective investigation, seizure, and recovery of digital assets.
Under the revised legislation, police are no longer required to arrest a suspect before seizing cryptoassets, which allows for quicker intervention against assets known to be criminally obtained.
This is particularly beneficial when dealing with criminals who maintain anonymity or are based overseas. The new rules also allow law enforcement to seize items that could provide investigative leads, such as written passwords or memory sticks.
Additionally, officers can now transfer illicit cryptoassets into an electronic wallet controlled by law enforcement, cutting off criminal access to these funds.
Another significant update permits the destruction of cryptoassets if reintroducing them into circulation would be detrimental to the public good, targeting privacy coins often used for laundering money.
Victims of crime now have the opportunity to request the release of funds from cryptoasset accounts identified as theirs, furthering efforts to remediate the impacts of crime.
Home Secretary James Cleverly emphasized that the legislative changes are aimed at ensuring criminals cannot benefit from unlawful activities and will also bolster national security by hindering terrorist financing through digital currencies.
Security Minister Tom Tugendhat expressed that the reforms send a clear message that criminal activities will not be profitable, underscoring the commitment of UK agencies to use their enhanced capabilities to dismantle sophisticated criminal networks.
Adrian Searle, Director of the National Economic Crime Centre, remarked on the significance of the new powers, which will improve the ability of law enforcement to manage and neutralize the financial operations of criminals using cryptoassets.
These reforms mark a significant step in the UK’s strategy to regulate the use of cryptocurrencies, aiming to curb their misuse while fostering their potential to drive economic growth.
