UK authorities have confiscated approximately $7.7 million (£6 million) in illegal cryptocurrency assets since April 2024, MailOnline reports.
In the wake of rising concerns over the use of cryptocurrencies for money laundering and terrorist financing, the UK has enhanced its regulatory framework, empowering the National Crime Agency (NCA) and police forces with the ability to freeze, seize, and destroy cryptocurrencies connected to criminal activities.
These augmented powers permit the police to immobilise crypto wallets for up to three years, and seize the assets if a court confirms they are linked to illicit activities or intended for criminal use.
Law enforcement is also authorized to seize crypto wallets associated with criminal organizations without making an arrest.
The revised regulations further allow the destruction of seized cryptocurrencies if reintroducing them into the market is deemed detrimental to public welfare.
This includes privacy coins, which are frequently used by criminals to hide the origins of illicit funds.
One of the most significant actions taken under these new powers was a freeze order issued against a wallet on Coinbase, which held $1.94 million (£1.5 million) in tokens.
The order was issued by Newcastle Upon Tyne Magistrates’ Court on March 18, initiated by His Majesty’s Revenue and Customs (HMRC), suggesting potential tax evasion involvement.
Nick Barnard, a partner at Corker Binning law firm, commented to MailOnline that, although $7.7 million might seem minor compared to the global daily crypto transactions or amounts frozen in traditional bank accounts, it is a significant start for UK authorities using these new powers.
He noted that the UK enforcement bodies are still adapting to these capabilities.
Siobhain Egan, a lawyer defending clients with frozen assets, told MailOnline that the government is increasing its focus on using these powers to combat money laundering and terrorist financing aggressively. She anticipates a surge in crypto freezing orders as authorities enhance their operational capabilities.
Egan also highlighted that the HMRC and the NCA are becoming more proactive in tackling illicit crypto activities.
She explained that freezing orders can be issued without notifying the alleged criminals, preventing them from transferring the frozen assets.
This preemptive freezing is crucial as it allows authorities to secure assets even before completing their investigations.
According to Egan, most of those affected by these seizures or freezing orders are foreign nationals, which adds complexity to the enforcement process.
She also noted that freezing is primarily feasible with crypto held on centralized exchanges like Coinbase, Kraken, or Binance that have a UK presence.
A major challenge remains the general lack of understanding of cryptocurrencies and blockchain technology among regulatory and investigative bodies.
Bernard pointed out that while crypto is a component of illicit financial flows, the majority of laundered money still passes through traditional channels.
