The UK government has introduced the Economic Crime and Corporate Transparency Act 2023.
This legislation, passed on October 26, purportedly targets fraud and money laundering, aiming to bolster the security of the UK’s economy.
The Act will empower law enforcement agencies more powers to seize and manage cryptocurrencies.
Purportedly, cryptocurrencies are often associated with illicit financial activities in the UK – the National Crime Agency’s finding states that it found over $1.2 billion of illegal cash sent overseas using cryptocurrencies in 2021.
One of the Act’s most contentious aspects is the simplified process for the police and the National Crime Agency to seize cryptocurrencies and convert them into fiat currency, even before a legal hearing.
Such a liquidation would ignore the volatility of the cryptocurrency markets, possibly putting cryptocurrency owners at financial risk, even if they weren’t guilty of any alleged crime.
That being said, it could also pave the way for arbitrary confiscations and undermine due process.
This streamlined approach, while supposedly more efficient, is rife with potential for misuse of power.
One other change in the Act is the expanded authority granted to Companies House, a government agency overseeing company registrations and incorporations.
Companies House is now endowed with the ability to conduct more stringent identity checks on company directors.
Ostensibly, this is to cleanse the official register of fraudulent entities and facilitate information sharing with law enforcement agencies.
While the UK government presents this Act as a resolute response to cryptocurrency misuse, skepticism looms large.