Author: Syedur Rahman 30 September 2022
The Economic Crime and Corporate Transparency Bill aims to root out criminal activity and illicit wealth.
It introduces additional powers to seize and recover cryptoassets as well as further anti-money laundering measures. There is little doubt that if it is enacted it will bolster law enforcement agencies’ ability to target cryptoassets that are subject to criminal or illicit activity such as fraud, money laundering and ransomware attacks. It will do this primarily by amending both the criminal confiscation powers in Parts 2, 3 and 4 of the Proceeds of Crime Act 2002 (POCA) and the civil recovery powers in Part 5 of POCA. This is being done in the context of a wider strengthening of anti-money laundering regulations.
One direct result of the amendments will be that law enforcement agencies will have greater powers to compel businesses, such as digital currency exchanges, to hand over information related to suspected money laundering and other illicit activity.
Director General of the National Crime Agency Graeme Biggar said in a statement: “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.”
While the Bill can be seen as further evidence of the UK government’s approach to regulation of cryptoassets, it does not address the cries that have been made for reform in relation to crypto exchanges and hosted wallet providers. While many have the goal of advancing the UK crypto economy in order to make it the most attractive market for current and potential investors, there are also many who wish to see the crypto markets brought under the regulation of bodies such as the Financial Conduct Authority. This, they believe, would ensure greater security and stability.
For now, it remains to be seen what the real world implications of these proposed measures will be - - and whether they will be enacted following the second reading of the Bill in the House of Commons on October 13. The Bill itself does, however, indicate that Liz Truss’ new government is keen to build on the groundwork laid by the previous government to bring crypto-related assets and services under tighter regulation.
Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.