This new law was legalised because organised criminals, including drug dealers, fraudsters and terrorists, are known to increasingly use crypto assets to launder the proceeds of crime and raise money.
The UK government has passed legislation to enable the National Crime Agency and police to seize, freeze and destroy crypto assets used by criminals.
This new law was legalised because organised criminals, including drug dealers, fraudsters and terrorists, are known to increasingly use crypto assets to launder the proceeds of crime and raise money.
According to the UK Government, the NCA's National Assessment Centre forecasts that illicit crypto transactions involving the UK will total at least £1.2 billion in 2021, if not much more.
To address this rising threat, the government has amended proceeds of crime and terror legislation, allowing UK law enforcement to more effectively investigate, seize, and reclaim unlawful crypto assets.
The legislation provides that 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 crypto assets 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 grants 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 crypto assets account to be released to them.
The changes that come into force last Friday 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 James Cleverly 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 Tom Tugendhat 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.