In order to make it simpler for law enforcement agencies to seize, freeze, and recover cryptocurrency assets when they are used for illegal activities like money laundering, drug trafficking, and cybercrime, the U.K. introduced a bill, the government announced on Thursday.
The Home Office, Department for Business, Energy & Industrial Strategy, Serious Fraud Office, and Treasury introduced the 250-page Economic Crime and Corporate Transparency bill, which extends beyond cryptocurrency and was initially promised in May. The House of Commons held its first reading on Thursday, and the second reading is slated on October 13.
According to Graeme Biggar, director general of the National Crime Agency, domestic and foreign criminals have been using U.K. company structures for years to launder the proceeds of their crimes and corruption.
The Economic Crime (Transparency and Enforcement) Act, which helped regulators impose sanctions against Russia and freeze related assets there, served as a foundation for the new legislation. Regulators are worried that some Russians are using cryptocurrencies to get around the sanctions put in place after their invasion of Ukraine.
The authorities have not been helpless even without the bill. After a 114 million pound haul in June, the London Metropolitan Police confiscated a record 180 million British pounds ($200 million) in cryptocurrency-related to money laundering in July 2021.
The Treasury changed its guidelines earlier this month, following other countries’ lead and requesting that cryptocurrency exchanges and wallet providers report potential sanction violations. Both the United States and the European Union made it clear that crypto is covered by their sanctions policies.
The Law Commission of England and Wales, a legally autonomous body charged with reviewing and updating the law, wants to broaden the definition of property to include cryptocurrencies and non-fungible tokens (NFT). Before, there were only two categories: “things in action,” which referred to property like stocks that could only be claimed or enacted by legal action, and “things in possession,” which refers to tangible assets like a “bag of gold.”
The UK has made it easier for cryptocurrency investors to file legal claims for losses sustained as a result of thefts or frauds, in addition to formally classifying digital assets as personal property.