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.
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.
The changes that come into force today will stop criminals from
undermining the legitimate use of crypto, while also supporting
the development of crypto as a potential driver of economic
growth.
Home Secretary said:
Criminals should never be able to benefit from breaking the law
which is why we are making it much easier for law enforcement to
stay on top of a new and developing threat.
These reforms will also enhance our national security. Terrorist
organisations like Daesh are known to raise funds through crypto
transactions and these updated powers will enable our agencies to
more easily strip them of their assets.
Security Minister said:
These reforms are bad news for criminals, they send a clear
message we will never let crime pay.
Our agencies have already shown they have the expertise to target
sophisticated criminals and deprive them of their ill-gotten
gains. These new measures will help them take the fight to the
next level.
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.
Adrian Searle, Director of the National Economic Crime Centre,
said:
Criminals are increasingly using crypto assets to conceal and
move the proceeds of crime at scale and pace, pay for other
criminal services and as a means to defraud victims.
These new powers are very welcome and will enhance law
enforcement's ability to restrain, recover and destroy crypto
assets if required.
They will enable a more effective pursuit of the criminals and
ultimately deny them the financial gain they crave.
Adrian Foster, Chief Crown Prosecutor, said:
The economic crime threat is continuously growing and evolving
with criminals exploiting advances in technologies like
cryptocurrency. Crypto assets are often used by criminal gangs to
launder their criminal profits internationally at the touch of a
button.
It is vital that investigators and prosecutors have the
capability and agility to keep pace with this changing nature of
crime which these new measures will greatly assist our ability to
restrain, freeze, or eliminate crypto assets from illegal
enterprise.
These powers allow the Director of Public Prosecutions to assist
law enforcement in crypto forfeiture cases where our expertise
can add real value.
