Business & Finance Digital

New laws to combat crypto-related crime

  • November 19, 2023
  • 2 min read
New laws to combat crypto-related crime

Lawmakers in Britain have passed a law that allows authorities to seize as well as freeze any cryptocurrencies that are linked to crime.

The Economic Crime and Corporate Transparency Bill, introduced in September 2022, expanded authorities’ ability to crack down on the use of cryptocurrencies in cybercrimes, scams, and drug trafficking. One provision of the bill permits the recovery of crypto assets used in crimes without a conviction, as some individuals may avoid conviction by remaining remote. The law also aims to fight against the use of digital assets “for the purpose of terrorism” or related reasons.

The latest crypto-related legal development in the UK aligns with the government plans to “robustly” regulate cryptocurrencies in order to fight the illicit use and trading of digital assets as part of its economic crime plan by 2026. In March 2023, lawmakers said that they targeted to pass the Economic Crime and Corporate Transparency Bill by the fourth quarter of 2023 along with adopting the Financial Action Task Force’s (FATF) Travel Rule.

The FATF is an intergovernmental organisation established in 1989 aiming to combat money laundering, terrorist financing as well as other threats to international financial systems. Its Travel Rule, known as FATF Recommendation 16, is a set of guidelines written for that purpose. It applies to financial institutions engaged in virtual asset transfers and crypto companies. It mandates that they obtain and disclose precise details regarding the sender and recipient of a virtual asset transfer, either during or before the transaction.

While the transfer of personal data between financial institutions is a long-established process, the Travel Rule is a new requirement as far as the crypto industry is concerned. It requires building an unprecedented communication network between crypto platforms to ensure compliance and fight against money laundering or terrorist financing.

As the UK government has been cracking down on crypto-related crimes, the country has also emerged as a major cryptocurrency economy. A report from blockchain analytics firm Chainanalysis in October 2023 found that the UK is the largest crypto country when it comes to raw transaction volume in Central, Northern, and Western Europe. In February 2023, crypto tax platform Recap reported that London was the world’s most crypto-ready city for business, followed by Dubai and New York.

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