UK authorities will be able to freeze criminal crypto assets without conviction

They will also be given powers to destroy such assets if necessary

04.03.2024 - 08:35

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What’s new? The UK authorities have passed an amendment to the Economic Crime and Corporate Transparency Act 2023 affecting cryptocurrencies. It will come into force on April 26 this year and will expand the ability of law enforcement agencies to confiscate and freeze cryptocurrencies used to commit crimes, including terrorist financing.

Text of the amendment

What else is known? Under the amendment, the National Crime Agency (NCA), established in 2013 to fight organized and cybercrime, as well as corruption, will be given powers to seize suspicious crypto assets without the need for a conviction. Law enforcers will be able to seize such digital assets from crypto exchanges or custodial wallet platforms, among others.

If necessary, authorities will also be able to destroy (burn) criminal cryptocurrencies, although the document does not describe how this will be implemented.

Cryptocurrency burning is the process of removing a certain number of tokens from circulation, after which they become permanently inaccessible. Often burning is carried out in order to increase the rate of an asset or prevent it from inflation. Burning can be done by sending tokens to a wallet without a private key, by conducting a hard fork, using special software, or using algorithms that destroy some of the funds during transactions.

Earlier, it became known that the UK will adopt a law on stablecoins and staking in the next six months. According to industry experts, fiat stablecoins and their issuers will be regulated under existing laws on payments, and staking will be singled out as a separate type of activity, unrelated to the concept of collective investment.

Last year, Britain’s financial regulator FCA approved only 4 out of 28 applications for licenses from crypto companies. According to experts, this threatens Prime Minister Rishi Sunak’s previously announced plan to turn the country into a crypto hub.

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