The UK introduced in Parliament a new bill to make it simpler for law enforcement agencies to seize, freeze, and recover cryptocurrency when it is used for criminal acts, such as money laundering, drug trafficking, and cybercrime.
The 250-Page Bill Goes Beyond Crypto
The new Economic Crime and Corporate Transparency Bill was introduced in a joint effort by the Home Office, Department for Business, Energy & Industrial Strategy, Serious Fraud Office, and Treasury. The first hearing was this Thursday, and the next one is scheduled for October 13.
The new law would make it simpler and quicker for law enforcement authorities, like the National Crime Agency, to seize, freeze, and recover crypto assets.
The UK Government repeats in the same announcement the common misconception used to define cryptocurrency: “the digital currency increasingly used by organized criminals to launder profits from fraud, drugs, and cybercrime”.
But the purpose of this framework goes beyond crypto and is said to enhance the UK’s reputation as a place where lawful businesses can prosper while driving dirty money out of the country. Through its provisions, anyone registering a company in the UK will need to provide proof of identity, thus preventing businesses from acting as a cover for criminal activity or overseas kleptocrats.
The Director General of the National Crime Agency, Graeme Biggar, stated that “Domestic and international criminals have for years laundered the proceeds of their crime and corruption by abusing UK company structures, and are increasingly using cryptocurrencies. These reforms – long awaited and much welcomed – will help us crack down on both”.
Although the bill has not been approved yet, London’s Metropolitan Police has already seen a rise in cryptocurrency seizures in 2021. According to BBC, by the 10th of June of 2021, they had seized nearly £180 million worth of cryptocurrency.
Back in March 2022, the UK approved the Economic Crime (Transparency and Enforcement) Act to enforce the sanctions related to Russia’s invasion of Ukraine. The new bill will continue this trend, appeasing the regulator’s concerns about the use of cryptocurrencies to circumvent the sanctions imposed by the European Union (EU).
Global Trend in Crypto Regulation
In the United States, the Federal Reserve has recently issued a guide providing additional information for banks engaging or seeking to engage in crypto-related activities.
In the EU, the creation of a new regulatory body focused on preventing money laundering in the crypto industry is one of the most relevant provisions of the new Anti-Money Laundering Directive 6.
Even more recently, reports emerged indicating that the groundbreaking Markets in Crypto Assets Regulation (known by the acronym MiCA) had reached its final draft and would soon be approved by the EU Parliament.
Authorities worldwide have been making an effort to approve and enforce a new set of rules to regulate cryptocurrencies. The Economic Crime and Corporate Transparency Bill is just the most recent one in a long line of frameworks that are expected to take effect in late 2022 or early 2023.