Enhanced powers have been granted to the National Crime Agency (NCA) and police by the UK government to seize and freeze cryptocurrency used in criminal activities. Under these new measures, the NCA can now confiscate cryptocurrency from suspects without the necessity of making an arrest beforehand. This legislative update, announced on April 26, represents a significant shift in the UK's strategy to combat crypto-related crime by amending proceeds of crime and terror legislation.

The revised laws empower law enforcement agencies to conduct more effective investigations, seizures, and recovery of illicit cryptocurrency. Notably, police can seize cryptocurrency assets without requiring an arrest, confiscate items aiding investigations, and transfer illicit crypto into controlled digital wallets inaccessible to criminals. Additionally, officials are authorized to seize items such as written passwords or memory sticks to gather information for investigations.

According to Home Secretary James Cleverly, these reforms are vital for enhancing national security, especially in light of terrorist organizations like Daesh utilizing crypto transactions to raise funds. The NCA highlights the increasing trend of organized criminals, including drug dealers, fraudsters, and terrorists, using cryptocurrency to launder illicit proceeds, estimating illicit crypto transactions linked to the UK to have amounted to at least £1.2 billion in 2021.

With these updated powers, the UK aims to prevent criminals from exploiting cryptocurrency while also fostering its legitimate use for economic growth.