UK Police, National Crime Agency Gain New Crypto Seizure Powers



The UK’s National Crime Agency (NCA) and police have been granted greater powers to “seize, freeze and destroy” crypto used by criminals.

According to a press release from the UK government, the new powers—which come into force today—mean that police will no longer be required to make an arrest before seizing crypto from a suspect. Police will also be able to seize items such as written passwords or memory sticks that “could be used to give information to help an investigation.”

Police officers will be able to transfer illicit crypto into wallets controlled by law enforcement, and will also be empowered to destroy a crypto asset “if required.” Victims of crime will also be able to apply to have money belonging to them in a crypto account to be released to them.

In a statement, UK Home Secretary James Cleverly said that, “Criminals should never be able to benefit from breaking the law which is why we are making it much easier for law enforcement to stay on top of a new and developing threat.” Cleverly pointed to crypto fundraising by “terrorist organisations like Daesh” as justification for the new police powers.

The announcement also singled out the use of cryptocurrency and NFTs by drug dealers and fraudsters.

“Criminals are increasingly using crypto assets to conceal and move the proceeds of crime at scale and pace, pay for other criminal services and as a means to defraud victims,” said Adrian Searle, Director of the National Economic Crime Centre in the UK. “These new powers are very welcome and will enhance law enforcement’s ability to restrain, recover and destroy crypto assets if required.”

Privacy coins “not conducive to the public good”

The UK press release singled out privacy coins as “not conducive to the public good.” Most cryptocurrencies such as Bitcoin and Ethereum use a public ledger and only afford pseudo-anyonymity to users; although wallet addresses are anonymous, once linked to an individual’s identity (for example, by know-your-customer procedures) every transaction made by that wallet can be identified and traced.

By contrast, privacy coins such as Monero and Zcash use various technologies to shield potentially identifying information about transactions.

In recent days, governments and law enforcement around the world—not just in the UK—have cracked down on crypto privacy projects. Earlier this week, U.S. authorities arrested the founders of Bitcoin mixer Samourai Wallet, charging them with conspiracy to commit money laundering.

And just yesterday, the U.S. Federal Bureau of Investigation (FBI) warned Americans against using “cryptocurrency money transmitting services” that are not registered as Money Services Businesses,” under U.S. law; Money Service Businesses (MSBs) are required to comply with know-your-customer (KYC) and anti-money laundering (AML) laws.

Michael Balcina, Digital Asset Partner at law firm Piper Adelman, suggested that the FBI’s warning was an attempt to “warn consumers away from smart-contract driven privacy tools” such as Samourai Wallet and Tornado Cash, while Bankless co-founder Ryan Adams pointed to the fact that “we’re arresting privacy devs right now and calling them msbs.”

Edited by Stacy Elliott.





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