The United Kingdom's National Crime Agency (NCA) and police have been granted expanded powers to confiscate and eliminate cryptocurrency used in criminal activities. Under the new regulations, law enforcement can seize crypto assets without the need for an arrest beforehand.

According to a statement from the U.K. Home Office, police can also confiscate items like passwords or memory sticks to aid investigations. Additionally, they have the authority to destroy a crypto asset if returning it to circulation is deemed harmful to the public.

Effective from April 26, the new laws enable police to transfer seized illicit cryptocurrency to wallets under their control, with crime victims having the option to reclaim funds from their crypto accounts.

U.K. Home Secretary James Cleverly emphasized the need to prevent criminals from profiting from illegal activities, citing crypto fundraising by groups as a key reason for granting these new police powers. He also highlighted the role of cryptocurrencies in funding terrorist organizations like Daesh.

These regulations stem from a crime bill passed by the U.K. parliament in 2023, facilitating the swift seizure of cryptocurrency.

Privacy coins were singled out in the press release as potentially harmful to the public good. While mainstream cryptocurrencies like Bitcoin and Ethereum offer some level of anonymity through public ledgers, privacy coins provide higher anonymity levels.

Despite wallet addresses being anonymous, transactions can be traced and identified once associated with an individual's identity through procedures like Know Your Customer (KYC).

The announcement acknowledged that cryptocurrencies and nonfungible tokens are used by drug dealers and fraudsters, but it aims to prevent their exploitation for illicit purposes while promoting legitimate economic growth opportunities.

Governments and law enforcement globally, including the United States, have intensified efforts against crypto privacy initiatives. On April 24, authorities in the U.S. arrested the founders of Bitcoin mixer Samourai Wallet on charges of conspiracy to commit money laundering.