Greater powers for the National Crime Agency and police to seize, freeze and destroy cryptoassets used by criminals have come into force today.
Greater powers for the National Crime Agency and police to seize, freeze and destroy cryptoassets used by criminals have come into force today.
Organised criminals, including drug dealers, fraudsters and terrorists, are known to increasingly use cryptoassets to launder the proceeds of crime and raise money. The NCA’s National Assessment Centre estimates that illicit crypto transactions linked to the UK are likely to have reached at least £1.2 billion in 2021, if not significantly higher.In January 2024, the NCA worked with the United States Drug Enforcement Administration to investigate a multi-million drug enterprise which led to $150 million, in cash and crypto, being seized.
Cryptoassets were also seized in a case where three men sold counterfeit drugs on the dark web and accepted crypto as payment, amassing £750,000 in the process. They were jailed for more than 20 years between them. In a separate case, HMRC seized three non-fungible tokens (NFTs) as part of an investigation into VAT fraud, with three people arrested on suspicion of attempting to defraud the agency of £1.4 million.
A small number of counter-terror investigations have also found terror groups are using crypto to raise funds. In 2021, a British man was sentenced to 12 years’ imprisonment after he used Bitcoin to send around £55,000 to Daesh.
To tackle this emerging threat, the government has updated proceeds of crime and terror legislation, making it easier for UK law enforcement to effectively investigate, seize and recover illicit cryptoassets. These changes include:
- Police will no longer be required to make an arrest before seizing crypto from a suspect. This will make it easier to take assets which are known to have been criminally obtained, even if sophisticated criminals are able to protect their anonymity or are based overseas
- Items that could be used to give information to help an investigation, such as written passwords or memory sticks, can be seized.
Officers will be able to transfer illicit cryptoassets into an electronic wallet which is controlled by law enforcement, meaning criminals can no longer access it. - UK law enforcement will be able to destroy a crypto asset if returning it to circulation is not conducive to the public good. Privacy coins, for example, are a form of cryptocurrency that grant an extremely high degree of anonymity and are often used for money laundering.
- Victims will also be able to apply for money belonging to them in a cryptoassets account to be released to them.