Cryptoassets | Proposed Confiscation Measures
In a previous article, posted to this website entitled ‘Economic Crime | Legislation Proposals’, we outlined some of the proposals contained within The Economic Crime and Corporate Transparency Bill (‘the Bill’), which is currently passing through the Committee stage of The House of Lords.
The Bill also makes provision for the confiscation of Cryptoassets within the Proceeds of Crime Act 2002 (‘POCA’) regime.
Tim Thompson of Kangs Solicitors now comments on such proposals.
Our award-winning Team, nationally recognised for its work in both Civil and Criminal financial investigations, including cryptocurrency investigations and prosecutions.
Our team is led by Hamraj Kang, a nationally recognised leader in the field of financial crime investigations.
We are here to assist and our Team can be contacted for confidential and discrete advice as follows:
Confiscation of Cryptoassets | Kangs POCA Solicitors
Whilst there exists a thriving and legitimate trading of cryptoassets, it is becoming increasingly apparent to international government investigation authorities that cryptoassets and cryptocurrency are being used to facilitate criminal conduct, such as Money Laundering and Terrorism.
Accordingly, in an endeavour to challenge this situation, proposed amendments within the Bill are designed to increase Law Enforcement powers required to seize and recover cryptoassets used in criminal conduct.
The following proposals are of particular interest:
Cryptoassets: Confiscation Orders / Forfeiture Orders
Schedule 6 amends Parts 2,3 & 4 of POCA and will allow Law Enforcement to:
- Exercise powers of seizure prior to arrest, during an investigation. (At present, seizure is only possible once an arrest has been made)
- Include cryptoassets within any Confiscation Order that is made
Cryptoassets: Civil Recovery / Forfeiture
Schedule 7 proposes amendments to POCA to make provision for a civil recovery regime in relation to cryptoassets and will allow Law Enforcement and the Judiciary to:
- Incorporate cryptoassets within the scope of Forfeiture Proceedings and Orders in the event they are found to be recoverable property or are intended for unlawful conduct. (These amendments are premised on the existing regime for Account Freezing Orders introduced through the Criminal Finances Act 2017).
- Recover cryptoassets from ‘Exchange Providers’ and ‘Custodian Wallet Providers’, through an application to the Magistrates’ Court.
- Convert cryptoassets into sterling cash currency, pending the outcome of any proceedings brought under Part 5 of POCA.
- Order destruction of cryptoassets in circumstances where they are not physically recoverable.
(1) Part 1 of Schedule 8 amends the Anti-terrorism, Crime and Security Act 2001 to make provision for a civil recovery regime in relation to cryptoassets which—
‘(a) are intended to be used for the purposes of terrorism,
(b) consist of resources of an organisation which is a proscribed organisation, or
(c) are, or represent, property obtained through terrorism.’
(2) Part 2 of Schedule 8 amends the Terrorism Act 2000 to make provision about financial institutions and crypto-assets and will allow Law Enforcement and the Judiciary to:
- Monitor and freeze cryptoassets wallets / accounts by adding cryptoasset ‘Exchange Providers’ and cryptoasset ‘Custodian Wallet Providers’ to the currency legislative definition of ‘authorised deposit takers’ and ‘relevant financial institutions’
- Add seizure and forfeiture powers in the Anti-terrorism, Crime and Security Act 2001. This addition allows for a more expeditious way of preventing the use of cryptoassets for use within terrorism
Who Can I Contact For Help? | Kangs Cryptoasset Solicitors
The Team at Kangs Solicitors is accustomed to advising and supporting clients regarding cryptoassets activity of whatever nature, including Applications brought under Part 2 – 5 of POCA.
We provide initial no obligation discussion at our three offices in London, Birmingham and Manchester.
Alternatively, discussions can be held virtually through live conferencing or telephone.