In the realm of cryptocurrencies, the United Kingdom has unveiled a new legislative proposal called the Economic Crime and Corporate Transparency Bill, aimed at providing local authorities with the capability to accelerate the process of freezing digital asset holdings. If this bill successfully passes later in the year, it could become law. According to experts, the bill is designed to prevent assets associated with criminal activities from being transferred prior to their seizure.
The bill, introduced in September 2022, has progressed to its final stages in Parliament as of early July. While the UK has already seized cryptocurrency assets valued in millions linked to criminal activities, this new legislation is expected to significantly accelerate the asset freezing process. In numerous instances, individuals involved in illicit activities have managed to move their ill-gotten gains overseas before authorities could seize them. The bill is specifically designed to address this issue.
Louise Abbott, a partner at Keystone, expressed, “This novel legislation, which empowers law enforcement to reclaim cryptocurrency assets in this manner, will serve as a potent tool, and it is anticipated that we will observe a substantial rise in the recovery of digital assets.”
The UK’s Crypto Crime Bill: An Examination of its Inherent Components
Presently, within the United Kingdom, the seizure of cryptocurrency assets connected to criminal activities is contingent upon authorities making an arrest or securing a conviction. Experts argue that this condition affords criminals the opportunity to transfer their assets before coming under official scrutiny. The new bill seeks to eliminate the necessity of an arrest or conviction to halt the movement of such assets. Nevertheless, it’s important to note that, from a technical standpoint, the actual confiscation of these assets will still require an arrest or a conviction in a court of law. However, the bill does introduce the possibility of asset confiscation through either court proceedings or civil forfeiture powers.
According to Phil Ariss, who serves as the director of U.K. public sector relations at TRM Labs and formerly held the position of head of crypto at the UK National Police Chiefs’ Council cybercrime unit (currently on sabbatical leave from the police force), this provision will likely come into play in cases where assets are identified, clear connections to criminal activities can be established, but it’s improbable that the subject of the investigation will face legal consequences in the United Kingdom.
Isabella Chase, a senior policy adviser at TRM Labs, has disclosed that the United Kingdom is planning to allocate $124 million for combating economic crimes, representing a 50% increase compared to the expenditure in 2020. This allocation might be a response to calls from authorities seeking additional funding to address cryptocurrency-related criminal activities.