According to recently released statutory instrument legislation, bitcoin assets linked to illicit activity in the United Kingdom will be able to be frozen by law enforcement agencies without a conviction.

The draft, which was released on February 29, outlined changes to the Economic Crime and Corporate Transparency Act 2023. These changes would give the National Crime Agency more authority to seize and confiscate cryptocurrency assets that are suspected of being connected to illegal activity without requiring lengthy judicial proceedings.

The UK's economic crime laws will include civil recovery orders for the seizure of cryptocurrency assets starting of April 26. Moreover, authorities will be able to take control of cryptocurrency assets by retrieving them directly from custodian wallet providers and exchanges, and if needed, they can destroy them.

A crypto token is usually destroyed by burning it and moving the tokens to a burn wallet address, which takes them out of circulation, albeit this process isn't stated clearly.

Since some people may avoid conviction by remaining abroad, one section of the Economic Crime and Corporate Transparency Bill allows the recovery of cryptocurrency assets used in crimes without the need for an initial arrest.

A clause in the bill that makes it illegal to resist or attack a law enforcement official while they are trying to seize a cryptocurrency asset is also included.


Combating cybercrimes

In response to growing worries about cryptocurrency's role in illegal operations like drug trafficking, frauds, and cybercrime, the UK has taken decisive action.

A noteworthy action was the 2022 introduction of the Economic Crime and Corporate Transparency Bill, which became an official Act of Parliament on October 26, 2023, after receiving royal approval.

The Bill came about as a result of the changing nature of financial crimes, such as corruption, bribery, fraud, and money laundering.
 

The National Crime Agency (NCA) of the United Kingdom formed the "Crypto Cell," a dedicated unit, in September 2022 to combat cybercrimes related to cryptocurrency. This endeavour is a symptom of a greater focus on combating financial crimes involving cryptoassets and cyber dangers.

With a primary focus on cryptocurrency-related offences, the National Cyber Crime Unit's Crypto Cell, which started out with five officers, has been given a proactive mission.

Additionally, in March 2023, the United States and the United Kingdom jointly announced sanctions against seven Russian cybercriminals linked to well-known ransomware assaults, such as the Conti and RYUK ransomware strains as well as the Trickbot malware. As part of these penalties, the perpetrators' assets are frozen, and their access to the international financial system is restricted.
 

In the near future, the UK government has stated that it intends to introduce new laws pertaining to stablecoins and cryptocurrency staking within the next six months.

Bim Afolami, the Treasury's Economic Secretary, emphasised that the administration is committed to enacting laws before to the next general election. The improvement of regulatory frameworks in the cryptocurrency industry is the explicit goal of this proposed rule.

The creation of regulations pertaining to staking services and stablecoins is on the agenda for the UK government. A suggested schedule calls for a mid-2024 consultation on final regulations, with the stablecoin regime going into effect in 2025.

Notable progress has been made in establishing a supportive regulatory framework for cryptocurrency companies operating in the UK, notwithstanding prior assurances and discussions regarding regulation of the industry.