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NCA seizes crypto assets worth £27m last year in a major money laundering crackdown
Although institutional acceptance of cryptocurrencies is increasing, the National Crime Agency (NCA) recently confiscated crypto assets worth £27 million, highlighting how criminal activity continues to be a major use for cryptocurrencies.
In its annual report, the NCA linked cryptocurrencies to the possibility of money laundering and cited the Russian invasion of Ukraine as a reason to be concerned about the unauthorised transfer of cryptocurrency assets.
The government has not yet put in place a comprehensive regulatory framework for crypto assets. Its legal jurisdiction over cryptocurrencies is somewhat constrained by current Anti-Money Laundering (AML) laws.
There have been indications of rising institutional regulation of cryptocurrency globally. A historic rule regulating crypto assets was approved by the European Union in July.
While the UK authorities still have yet to implement their own regulatory system, the British crime agencies increased the response toward digital assets by seizing assets in a money laundering crackdown as the government acts on catching up with the technology.
The technology is attractive to criminals as it provides them with anonymous solutions, but the authorities have developed ways of tracing transactions back to specific people.
Michael Munk, the managing associate in Linklaters’ dispute resolution team, said “The NCA seizure of c.£27m of crypto assets in 2021-22 shows that the UK’s criminal and regulatory authorities are developing a deeper understanding of crypto assets and an appetite to take enforcement action where appropriate,”
“This is consistent with the global trend where, after years of playing catch-up, law enforcement agencies are showing an increased aptitude for tracing and seizing stolen or laundered crypto assets.”
The Treasury Committee said earlier this month that it would be conducting an investigation into the use of cryptocurrency in the UK. The inquiry’s purpose is to investigate the advantages and threats that cryptocurrencies pose to the economy.
MP Mel Stride, chair of the Treasury Committee stated: “Cryptoassets have the potential to bring new and innovative changes to the UK financial system, the economy and broader society,”
“However, there are also significant concerns around their use to launder funds, purchase illegal products, and evade international sanctions.”