As of April 26th 2024, The Economic Crime Legislation in the United Kingdom will incorporate civil recovery orders to facilitate the confiscation of cryptocurrency assets including Bitcoin.
The government in the U.K. recently released documentation stating that United Kingdom authorities will have the ability to freeze digital currencies that include Bitcoin, used for illegally gained money like cryptocurrency fraud money laundering for drug dealers or any kind of criminal activity without requiring a conviction.
The document which was published on February 29th 2024, details amendments that will be made to the Economic Crime and Corporate Transparency Act 2023. This will give more power to the UKs National Crime Agency to freeze and obtain crypto assets like Bitcoin that the agency deems are linked to illegally gained money, without the requirement for undergoing lengthy legal processes.
Cryptocurrency Exchanges And Custodian Wallet Providers
Authorities will have the capability to directly request cryptocurrency assets from cryptocurrency exchanges and custodian wallet providers from users without questions or a investigation.
What Will They Do With The Bitcoin Seized?
Once they have the Bitcoin in their possession, they can do what ever they like with it, including selling or burning the coins.
No Investigation Or Arrest Needed
At the moment, in order for the police to freeze crypto assets like Bitcoin there needs to be an investigation with a conviction of a crime. This bill changes that.
Why Is This Bill Being Passed?
Their reasoning for this new bill is that criminals could quickly move their crypto funds if they figure out that they are under investigation, making it harder for authorities to freeze it.
Allegedly this has happened multiple times globally, pushing the government to pass this bill.
Once this bill passes, police will be able to freeze crypto funds before any arrests or convictions are made.
How Much Has Been Seized So Far
According to the New Scientist article UK police have seized over £300 million in Bitcoin in 2022. That’s $380 million USD.
In 2024 authorities in the UK seized $1.8 Billion in Bitcoin, connected to a money laundering operation linked to China. Source – CoinDesk
During this trial, a woman named Jian Wen was accused of laundering cryptocurrency for her former employer Yadi Zhang making it one of the largest ever seizures of Bitcoin in history.
In this case, the UK police confiscated four hardware wallet devices containing over 61,000 bitcoins from a safety deposit box located in the house where Wen and her employer, Yadi Zhang lived together. At the time 61,000 Bitcoin was worth around $1.8 Billion dollars USD.
According to the data gathered by the National Crime Agency, there are billions of dollars of cryptocurrency being used for criminal activities including money laundering.
Conclusion
Over the next 3 years, UK police will be allocated $125 million to help fight financial crime, which sounds like a lot of money but according the to police in the UK its not enough and they will need more funding.
The UK is the first country to implement such drastic measures, but this trend will spread globally as governments are seeking more regulatory oversight on Bitcoin and the digital currency sector.
