United Kingdom police have frozen £6 million in illicit crypto proceeds since 2024

United Kingdom police in conjunction with the courts have frozen about £6 million in illicit crypto proceeds since new powers came into effect last year. Before then, criminals have always had a field day using digital assets like Bitcoin for different illicit activities, including money laundering, tax evasion, and terrorism financing.

While there was at least little scrutiny on activities, United Kingdom ministers met in April 2024 to launch a crackdown on the emerging threats in the sector. The crackdown allowed the police, other law enforcements, and the HMRC, the UK’s tax, payments, and customs authority to freeze suspicious funds and cryptocurrency wallets.

Under the regulation, the United Kingdom law enforcements were granted the authority to seize ill-gotten gains from suspected criminals elements, granting them the approval to freeze crypto wallets for up to three years. Funds frozen in digital assets can be seized under the condition that a court must be satisfied that the holder acquired the tokens in the wallet under illicit circumstances.

United Kingdom authorities crackdown on illicit crypto proceeds

According to a MailOnline report, an analysis of the court documents published over the last six months revealed that the biggest crypto freeze and seizure so far was about £1.5 million. The document revealed that the funds were kept in a single wallet hosted on United States-based crypto exchange Coinbase, with the actual owner remaining a mystery. The order filed by the HMRC on March 18 at the Newcastle Upon Tyne Magistrate’s Court revealed that the funds could be related to tax evasion.

Reports also claimed that more funds could have been frozen between April and September 2024, but the data maintained by Courtdesk, the online database for tracking court proceedings in England and Wales only goes back a year due to legal reasons. According to United Kingdom crypto legal expert Nick Barnard, the figure is quite small compared to the large-scale funds that are exchanged during illicit activities. The partner at Corker Binning mentioned that these actors carry out transactions worth billions every day, noting the amount seized in traditional accounts by authorities.

Barnard mentioned that the new regime began their operations in April 2024, so they still need a little bit of time to be up to speed. Meanwhile, lawyer Siobhain Egan mentioned to MailOnline that the government is pooling in more resources to aggressively combat money laundering, hence all the freezing that has been happening. Egan, who represents people whose assets have been frozen, expects “a tsunami of freezing orders” in the coming months.

Authorities ramp up efforts to combat illicit acts

According to the reports, United Kingdom investigators usually work behind the scenes before applying to freeze the funds in the wallets of alleged criminals. This means they do it without their knowledge to prevent them from moving the funds. “If the police have a major investigation into organized criminals laundering money through crypto, they will go in and seize the assets before they finalize the investigation,” Egan said. She also added that in some cases, the owners of the funds will be invited to answer questions, noting that it will help authorities build their cases.

Egan added that United Kingdom authorities have been wary of villains using digital assets for illicit activities, noting that they are right to be worried. She added that the new powers are using the crackdown to plug the investigative gaps, noting that it took them a while to catch up in the fast-moving world of cryptocurrencies. “HMRC is very keen on tackling tax evasion and are getting their act together pretty well. The National Crime Agency (NCA) has also been very aggressive,” she said.

She also added that most of the people who have been subject to seized assets and fund freezes have been foreign nationals. According to public records, digital assets were used in transacting about $51 billion worth of illicit activities last year. This figure is up from the $46 billion that was on record, excluding the billions stolen from FTX co-founder Sam Bankman-Fried, who is presently in jail for defrauding US customers and investors.

Criminals dump Bitcoin for stablecoins

According to a Chainalysis report, criminals are now dumping Bitcoin to use stablecoins for their illicit activities. Up until about 2020, Bitcoin was the most used asset, with the criminals now switching to tokens pegged to a currency, which in this case is usually the dollar. Barnard mentioned that most of the police and finance investigators have limited knowledge of the crypto industry and not much resources are being dedicated by the United Kingdom to understanding or investigating them.

He added that more resources are being put towards investigating money laundering using cash and other traditional methods than cryptocurrencies. He also said that some of the proceeds from crimes like drugs, and weapons are always laundered using crypto, while most of the proceeds are usually in cash. Bernard stated that it is practical to freeze funds on known exchanges, knowing that the United Kingdom has connections to enforce it.

A big case in the United Kingdom saw about £4.5 billion in Bitcoin seized from a Chinese takeaway worker last year. The 42-year-old used the funds, which she got from laundering £5 billion from an investment fraud, to furnish her lavish lifestyle. According to authorities, she bought a vehicle worth £30,000 and enrolled her child in a £6,000-a-term school near her £5 million home. She was apprehended when she attempted to build a global property empire, trying to buy a Hampstead mansion worth £23 million, a Tuscan villa worth £10 million, and apartments in Dubai. She was sentenced to jail for six years in May 2024.

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