The U.K. government has recently issued official documentation that states law enforcement authorities in the country will have the power to freeze cryptocurrency assets used in criminal activities without the need for a conviction. The release of this information was outlined in a document published on Feb. 29, which details the amendments made to the Economic Crime and Corporate Transparency Act 2023. These amendments will expand the authority of the National Crime Agency to confiscate and seize cryptocurrency assets that are suspected to be involved in illicit activities, without the requirement of extensive legal procedures. The new legislation will come into effect on April 26.
Furthermore, under the new laws, authorities will also have the ability to directly retrieve cryptocurrency assets from exchanges and custodian wallet providers. Additionally, they will have the option to destroy these assets if necessary. While the document does not provide specifics on the process, the most common method of destroying a cryptocurrency token is by “burning” it. This involves transferring the tokens to a burn wallet address, effectively removing them from circulation.
The main objective of this legislation is to enhance the authorities’ capabilities in combating the use of cryptocurrencies in various types of crimes, such as cybercrime, scams, and drug trafficking. The Economic Crime and Corporate Transparency Bill, which was passed in September 2022, aims to expand the powers of law enforcement agencies in dealing with these issues. One provision of the bill allows for the recovery of cryptocurrency assets used in crimes without the need for an arrest, as some perpetrators may evade conviction by remaining outside the country.
However, there have been concerns raised about the effectiveness of U.K. authorities in handling cryptocurrency-related crimes against U.K. residents. A British national who fell victim to cryptocurrency fraud and lost approximately $46,000 to scammers claimed that the agency failed to take appropriate measures to recover his stolen funds. This highlights the potential challenges that law enforcement may face in effectively dealing with these types of crimes.
In addition to the new legislation on freezing and seizing cryptocurrency assets, the U.K. government is also planning to introduce new laws to regulate stablecoins and crypto staking within the next six months. During a crypto event held in London on Feb. 19, Economic Secretary to the Treasury Bim Afolami revealed that the government aims to complete the regulation process before the next election, which is scheduled to take place no later than Jan. 28, 2025.
In related news, the owner of a highly sought-after CryptoPunk Seedphrase, which possesses seven unique traits, has partnered with renowned auction house Sotheby’s. This collaboration demonstrates the increasing popularity and value of non-fungible tokens (NFTs) among collectors and investors in the cryptocurrency space.