The UK government is tightening AML/KYC rules that directly affect the ownership of digital assets. In this step, the government closes loopholes affecting ill-gotten gains.
The British government is giving law enforcement agencies new powers to seize and destroy crypto. The move comes as part of a broader strengthening of the UK’s Anti-Money Laundering and Know Your Client (AML/KYC) regulations under the Economic Crime and Corporate Transparency Act 2023. Starting on April 26, 2024, the National Crime Agency (NCA) can seize digital assets suspected of being used in a crime. Most importantly, a conviction is not required for the NCA to do so.
From April 26, the NCA will be able to directly retrieve digital assets and specific amounts of fiat from exchanges and custodial service providers, if said amounts are suspected of having been involved in crime.
On February 29th, the British government announced amendments to the Act. These amendments, which will go into effect in April, include:
“A magistrates’ court may order the UK-connected crypto asset service provider which administers the crypto wallet in which the crypto assets are held —
(a) to realize the crypto assets, or a portion of the crypto assets having a specified value,
(b) to pay the proceeds of that realization to the designated officer for the court on account of, and up to a maximum of, the amount payable under the confiscation order, and
(c) to the extent that the proceeds of the realization exceed the amount payable under the confiscation order, to pay the excess to an appropriate officer identified in the order.”
