Proposed U.K. Legislation Would Enable Harsher Crackdowns on Crypto Crime

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Key Takeaways

  • The U.K. government has introduced new legislation called the Economic Crime and Corporate Transparency bill.
  • The bill will give the government greater power to “seize, freeze and recover cryptoassets” used in crime.
  • The bill is not strictly related to cryptocurrency and will also target illegal financial activity in general.

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The U.K. has introduced a bill that will allow it to take stronger actions against illegal finance and cryptocurrencies.

Legislation Will Allow for Crackdowns

U.K. lawmakers have introduced legislation titled the Economic Crime and Corporate Transparency bill, which is designed to empower authorities to crack down on crypto-related criminal activity.

According to a government announcement, the new bill will allow law enforcement agencies like the National Crime Agency to “seize, freeze and recover cryptoassets.”

The U.K. government said that cryptocurrency is increasingly being used to launder revenue from fraudulent activity, the drug trade, organized crime, and cybercrime.

The announcement specifically noted that Greater London’s Metropolitan Police Service reported “a big rise in cryptocurrency seizures last year.” In the summer of 2021, police set two records by seizing cryptocurrency worth $158 million and $250 million just weeks apart.

Graeme Biggar, Director General of the National Crime Agency, concurred that criminals are “increasingly using cryptocurrencies.” He said that the new law would help law enforcement organizations “crack down” on terrorism, both internationally and domestically.

In addition to targeting illegal crypto activity, the bill also targets illicit finance in general. It will require anyone registering a business to verify their identity and will curtail the abuse of limited partnerships. Finally, it will give law enforcement greater powers to investigate fraud and demand information related to crime.

The package builds on earlier legislation called the Economic Crime (Transparency and Enforcement) Act. That act was created following Russia’s invasion of Ukraine to allow the U.K. to impose harsh sanctions on Russian actors quickly.

Today’s proposed legislation is just one example of the U.K.’s movement toward stricter crypto policies in recent months.

In March, the Bank of England began to call for more regulation. In June, it called for stablecoin regulations. In July, Her Majesty’s Revenue and Customs (HMRC) began seeking potential taxation rules for DeFi platforms. In late August, the U.K. government extended sanctions reporting requirements to some crypto companies. Also in August, the U.K’s Financial Conduct Authority (FCA) placed restrictions on crypto-related marketing.

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.

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