UK authorities to gain enhanced powers in confiscating crypto assets

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The UK government has unveiled statutory instrument documentation indicating that law enforcement agencies in the UK will gain the authority to freeze crypto assets involved in criminal activities without necessitating a conviction, effective from the end of April.

Released on February 29, the document delineates revisions to the Economic Crime and Corporate Transparency Act 2023, which empower the National Crime Agency to seize and confiscate suspected crypto assets associated with suspicious illicit behaviour.
 
Moreover, authorities will possess the capability to retrieve crypto assets directly from exchanges and custodian wallet providers. They will also have the discretion to destroy  
cryptocurrency assets if deemed necessary.
 
Although the process was not detailed, the typical method for destroying a cryptocurrency token involves "burning" it, wherein the tokens are transferred to a designated burn wallet address, effectively removing them from circulation.

The legislation is scheduled to come into effect on April 26.

The enacted legislation seeks to enhance authorities' capacity to combat the utilisation of cryptocurrency in criminal activities such as cybercrime, scams, and drug trafficking.
 
One provision of the Economic Crime and Corporate Transparency Bill enables the recovery of cryptocurrency assets used in criminal activities without the necessity of making an arrest first, particularly targeting individuals who may evade conviction by staying abroad.

However, a British citizen who fell victim to cryptocurrency fraud, losing approximately $46,000 to scammers, has expressed concerns that UK authorities might be inadequately equipped to address crypto-related crimes against UK residents. He stated that the agency failed to take adequate steps to recover his stolen funds.

Meanwhile, the UK government is planning to introduce new regulations concerning stablecoins and cryptocurrency staking within the next six months. At a cryptocurrency event in London on February 19, Economic Secretary to the Treasury Bim Afolami revealed that the government aims to finalise regulations before the upcoming election, which is scheduled to take place no later than January 28, 2025.

The UK government's commitment to regulating stablecoins and crypto staking underscores its proactive approach to navigating the evolving landscape of digital finance.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist.
Twitter: @bhardwajshash