The United Kingdom’s National Crime Agency (NCA) and police have been granted expanded powers to seize, freeze, and eliminate cryptocurrency used by criminals. With the implementation of the new rules, police will no longer need to make an arrest before confiscating crypto assets.
According to a press release from the U.K. Home Office, law enforcement can also seize items such as passwords or memory sticks that may aid in investigations. Additionally, U.K. authorities will have the authority to eliminate a crypto asset if returning it to circulation is deemed harmful to the public.
Under the new laws, which will take effect on April 26, the police can transfer seized illicit cryptocurrency to wallets under their control, and victims of crimes can apply to recover funds from their crypto accounts.
U.K. Home Secretary James Cleverly emphasized that criminals should not profit from illegal activities, citing crypto fundraising by groups as the reason for the enhanced police powers.
These regulations were enacted following the passage of a crime bill by the U.K. parliament in 2023, which facilitated the swift seizure of cryptocurrency.
The press release specifically mentioned privacy coins as being detrimental to the public good. While most cryptocurrencies like Bitcoin (BTC) and Ether (ETH) provide users with a certain level of pseudo-anonymity through public ledgers, privacy coins offer even greater anonymity.
However, it is important to note that even with anonymous wallet addresses, transactions made by those wallets can still be traced and identified once associated with an individual’s identity through procedures like Know Your Customer (KYC).
The announcement acknowledged that cryptocurrencies and nonfungible tokens are being used by drug dealers and fraudsters, as evidenced by various investigations. The new changes aim to prevent criminals from exploiting crypto for illicit purposes while also promoting its potential to drive legitimate economic growth.
It is worth mentioning that governments and law enforcement agencies worldwide, not just in the U.K., have recently intensified their efforts against crypto privacy initiatives. For instance, on April 24, the founders of Bitcoin mixer Samourai Wallet were apprehended in the United States on charges of conspiracy to commit money laundering.