Criminal Crypto Holdings Confiscated by UK Police

The United Kingdom’s National Crime Agency (NCA) and police have been granted expanded authority to confiscate and destroy cryptocurrency used by criminals. Under the new rules, UK police will no longer need to make an arrest before seizing cryptocurrency holdings. They can take possession of items like passwords or memory sticks that could aid in their investigations. Law enforcement will also have the power to eliminate a crypto asset if returning it to circulation is considered detrimental to the public good. These new regulations will take effect on April 26.

As part of these changes, the police can transfer seized illicit cryptocurrency to wallets under their control, and victims of crimes can apply to reclaim funds from their crypto accounts. UK Home Secretary James Cleverly emphasized that criminals should not profit from illegal activities. He pointed to cryptocurrency fundraising by groups as the reason behind the new police powers, stating that these reforms will also enhance national security. Terrorist organizations like Daesh have been known to raise funds through crypto transactions, and these updated powers will make it easier for agencies to strip them of their assets.

The introduction of these regulations follows the passage of a crime bill by the UK Parliament last year, aiming to enable the swift seizure of cryptocurrency. The press release highlights privacy coins as being detrimental to the public good. While cryptocurrencies like Bitcoin and Ethereum offer pseudo-anonymity to users through public ledgers, privacy coins provide an even higher level of anonymity. It is worth noting that once a wallet address is associated with an individual’s identity through procedures like Know Your Customer (KYC), all transactions made by that wallet can be traced and identified.

The announcement acknowledges that drug dealers and fraudsters have utilized cryptocurrencies and nonfungible tokens (NFTs) for illicit purposes, as evidenced by previous investigations. The intention of these new changes is to prevent criminals from exploiting cryptocurrencies for illegal activities while also fostering its legitimate potential for driving economic growth. It should be noted that governments and law enforcement agencies worldwide, not just in the UK, have recently ramped up their efforts against privacy initiatives in the cryptocurrency space. Just this week, US authorities apprehended the founders of Bitcoin mixer Samourai Wallet on charges of conspiracy to commit money laundering.