UK Introduces Legislation to Seize Illicit Crypto Funds

• The UK’s new legislation grants law enforcement greater power to seize and even destroy illicit crypto assets.
• By centralizing crypto regulations, the UK aims to combat financial crime while enhancing legal efficiency.

Following the UK Treasury’s confirmation of crypto staking rules effective January 31, as discussed in a recent CNF update, the UK government has introduced the Crime and Policing Bill—a comprehensive piece of legislation aimed at enhancing law enforcement’s ability to seize and recover illicit cryptocurrency funds.

This bold move builds on previous measures designed to combat financial crimes involving digital assets, ensuring that authorities have the necessary tools to address emerging threats.

Expanded Powers for the Crown Court

One of the bill’s key provisions is the expansion of the Crown Court’s authority, allowing it to issue seizure orders for money, cryptocurrencies, and other assets linked to criminal activity. This adjustment streamlines legal procedures, making it easier for courts to confiscate and manage digital assets obtained through illegal means.

The bill also introduces clearer valuation methods for seized cryptocurrencies, ensuring that their worth is accurately assessed during legal proceedings.

Destruction of Seized Crypto Assets

A significant feature of the bill is its provision for the destruction of confiscated cryptocurrencies. If courts determine that holding or liquidating seized assets is not practical, they may order their destruction.

Specifically, as stated in the official UK government report, greater powers for the National Crime Agency (NCA) and police to seize, freeze, and destroy crypto assets used by criminals came into force in April 2024. The report highlights:

Organized criminals, including drug dealers, fraudsters, and terrorists, are known to increasingly use crypto assets 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.

The bill specifies that the value of the assets at the time of destruction will be recorded, with adjustments made for market price fluctuations. This ensures transparency and prevents potential manipulation of seized funds.

Streamlining Crypto Confiscation Procedures

The legislation also introduces jurisdictional changes, transferring crypto-related confiscation cases from magistrates’ courts to the Crown Court. This shift is intended to improve the efficiency of legal processes, reducing delays and ensuring that cases involving digital assets are handled with greater expertise.

In another CNF update, it was highlighted that Coinbase secured FCA registration, allowing it to offer crypto services directly in the UK, strengthening its European market position. By centralizing authority, the government aims to enforce crypto regulations more effectively.

Bitcoin Market Impact

Bitcoin’s price movement remains a key indicator of broader market sentiment, influencing regulatory discussions like the UK’s latest legislation on illicit crypto funds. As of now, Bitcoin (BTC) is trading at approximately $86,494, reflecting a 2.52% decrease in the past day.