- UK law enforcement will soon have more power to seize crypto assets linked to illegal activity without a court order. This policy change takes effect April 26th.
- The amendment to the Economic Crime Act allows police to freeze assets for 90 days if criminality is suspected. This aims to disrupt terrorist financing.
- Privacy advocates have raised concerns about how expanded powers could impact legitimate crypto holders who may struggle to prove assets are from legal sources.
The ability to take crypto used for crime, including terrorism, looks poised to take effect on April 26. This new policy will expand law enforcement’s power to seize digital assets in the UK.
Background on the Policy Change
The UK government has approved an amendment to the Economic Crime Act that will go into effect in late April. This amendment will make it easier for law enforcement to seize crypto assets linked to illegal activity.
Previously, UK police needed a court order to seize crypto. Under the new rules, they will have the power to freeze assets for up to 90 days if they suspect a link to criminality. This is meant to disrupt terrorist financing and prevent assets from being moved or hidden.
The Impact on Crypto Holders
While aimed at criminals, privacy advocates have raised concerns about how the expanded powers could impact regular crypto users. They worry law enforcement could overreach and seize assets from innocent holders.
However, authorities state they will still need “reasonable grounds” to suspect criminality before freezing assets. The onus will be on holders to then prove assets are from legitimate sources.
Critics argue this undermines the presumption of innocence. They also point out that it can be difficult for some users to provide sufficient evidence about the providence of their crypto.
Looking Ahead
This policy change is part of a global trend of governments expanding oversight of the crypto space. Advocates hope the new powers will indeed disrupt crime, while still protecting the rights of lawful holders. However, the details remain contentious.
As the amendment goes into effect, privacy groups plan to monitor its implementation closely. They want to ensure law enforcement uses its expanded authority judiciously. This will be an important test case as governments around the world grapple with regulating digital assets.
