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UK Government’s plans to raise as much as £200m a year from seizing crypto assets at risk without proper investment

Published on 07 December 2022

Recognition of the scale of use of cryptocurrencies by criminals

However greater resources needed to pursue recovery of these assets

Plans by the UK Government to seize as much as £200m a year in crypto assets* will be difficult to implement without significant investment in resources to pursue such seizures, says international law firm RPC.
 
The Government hopes to improve its track record in seizing crypto assets from criminals through a series of measures contained in the Economic Crime and Corporate Transparency Bill, which was introduced to Parliament on 22 September 2022.
 
While the value of seizures could be as much as £200m a year, the Home Office estimates an average haul of £50m per year in crypto assets seized.
 
Adam Craggs, Partner and Head of the Tax, Financial Crime and Regulatory team at RPC says: “Growth in the usage of cryptos has been explosive in recent years. These plans to step up the seizure of cryptocurrencies from criminals are an acknowledgement of that.
 
"While the intention of the Bill is laudable, the Government will need to ensure that the relevant agencies are provided with sufficient resources if these measures are to produce the intended result.
 
Alice Kemp, Employed Barrister and Senior Associate at RPC, says: “Criminals are increasingly being paid in cryptocurrencies and using cryptos to launder the profits they are making from everything from drug dealing to sophisticated white collar crime.
 
“The Government will need to invest heavily in its enforcement agencies to ensure that they have the training, tools and headcount to pursue cryptocurrency in order for these measures to be effective.”
 
In the last year (March 31, 2022) the UK’s National Crime Agency and other UK law enforcement bodies had seized £27m in cryptocurrency**.
 
The proposed reforms in The Economic Crime and Corporate Transparency Bill include:

  • Removing the need, in certain circumstances, for a person to be arrested before crypto assets can be confiscated.

  • Magistrates' Courts will be given the power to authorise the sale of cryptocurrencies that have been seized by enforcement agencies.

  • Giving officers more explicit powers to transfer crypto assets to a law enforcement-controlled wallet.

  • Enable law enforcement agencies greater powers to take control of crypto assets discovered when executing a search warrant.

*Economic Crime Bill impact assessment
**National Crime Agency Annual Report