From April 26, law enforcement in the UK gains more power to tackle cryptocurrency used for criminal activities.

Expanded Police Powers

The National Crime Agency (NCA) and UK police now have the authority to seize and take down cryptocurrency used unlawfully, without needing to arrest anyone first.

Enhanced Investigation Tools

According to the UK Home Office, police can also seize things like passwords or memory sticks to aid investigations. Additionally, they can destroy crypto assets if returning them to the market might cause harm.

Victims’ Rights Protected

Under the new rules, police can transfer seized illegal cryptocurrency to wallets controlled by law enforcement. Victims can then apply to get their funds back from these accounts.

Rationale Behind the Changes

UK Home Secretary James Cleverly emphasized that criminals shouldn’t profit from illegal activities, citing instances of groups using crypto for fundraising.

National Security Concerns

Cleverly also highlighted the importance of these changes for national security, mentioning terrorist groups like Daesh using crypto transactions for funding.

Legislative Background

These regulations stem from a crime bill passed by the UK parliament in 2023, enabling faster seizure of cryptocurrency.

Targeting Privacy Coins

Privacy coins, known for providing higher anonymity levels than regular cryptocurrencies like Bitcoin and Ethereum, are particularly singled out in the legislation.

Balancing Privacy and Security

While the announcement acknowledges the potential privacy concerns with cryptocurrencies, it stresses that proper identification procedures can trace transactions back to individuals.

Global Efforts Against Crypto Crime

The crackdown on crypto privacy isn’t limited to the UK. Recent arrests in the US, like those of the founders of Bitcoin mixer Samourai Wallet, show a global push to combat illicit crypto activities.

The UK’s new measures aim to curb crypto-related crime while also ensuring legitimate economic growth opportunities. These changes reflect a broader international trend towards tighter regulation of cryptocurrencies.