The Met, Money Laundering and Meeting the Cryptocurrency Challenge
For a police force that has been largely lagging behind its counterparts around the world, the Metropolitan Police appears to have started to turn the tide in its efforts to tackle cryptocurrency-related crime.
On July 13, the Met announced thar detectives from its Economic Crime Command had seized cryptocurrency worth £180 million as part of money laundering probe. It was the largest crypto asset raid in the UK to date and is believed to be one of the world’s largest confiscations. The announcement came less than three weeks after crypto assets worth £114 million were seized by the same police force as part of another money laundering investigation.
The definition of money laundering
Money laundering can be defined as "the process by which the proceeds of criminal conduct are dealt with in a way to disguise their criminal origins". The various offences are found in the Proceeds of Crime Act 2002 (POCA), which criminalises both the process of overt money laundering and the failure of otherwise legitimate businesses to report suspicions of money laundering.
There are three money laundering offences in POCA relating to the direct handling of the proceeds of crime. These can be committed by any person.
It is an offence to:
- Conceal, disguise, convert or transfer the proceeds of crime, or to remove the proceeds of crime from the jurisdiction of England and Wales. This is the basic money laundering offence (section 327).
- Enter into, or become concerned in an arrangement, in which the person knows or suspects the retention, use or control of the proceeds of crime. This is the aiding and abetting offence (section 328).
- Acquire, use or possess the proceeds of crime. This is known as the handling stolen goods offence (section 329).
Money laundering and cryptocurrency
Materially, whether the proceeds of the crime are normal fiat currency (like pound sterling) or crypto assets (such as Bitcoin) should make no difference to a criminal investigation into money laundering.
If law enforcement can establish that a crypto asset has been, for example misappropriated from its rightful owner as part of a scam, then the same money laundering offences will apply as if it were fiat currency.
The need to do more
The pressure is intensifying as authorities look to stop cryptocurrency being exploited for money laundering. Data obtained from Action Fraud, the UK’s national fraud reporting service, shows that in the 12 months to December 2020, reports of scams relating to cryptocurrency investments surged 57 per cent year-on-year, to 5,581. In January, as Bitcoin continued its ascent to record highs, the number of reports were double the total for the same month in 2020. The January 2021 total was 720 – equivalent to about 23 a day.
Victims said they lost £113 million last year to cold callers and other criminals promoting fraudulent cryptocurrency investments, according to the data received through a freedom of information request sent by the Investors’ Chronicle.1
So, while the latest seizures by the Metropolitan Police are a step in the right direction, there is still a long way to go.
Rahman Ravelli has a wealth of experience in financial crime and is uniquely placed to support clients that are the subject of law enforcement investigations; having been involved in some of the most high-profile, multi-million-pound, cross jurisdictional cryptocurrency fraud cases.
- https://www.investorschronicle.co.uk/news/2021/03/04/cryptocurrency-scams-soar-during-the-bitcoin-frenzy/
