The United Kingdom’s House of Lords has propelled The Economic Crime and Corporate Transparency bill into its final stages of approval. This landmark legislation, introduced in September 2022, was crafted to amplify the capabilities of financial authorities within the nation. Its goal? To seize the ill-gotten gains of financial crimes, including those involving cryptocurrency heists.
The Road to Approval
Over twelve months, the bill has navigated through the intricate landscape of both the House of Commons and the House of Lords, successfully clearing all five stages. This rapid progress is a testament to the growing recognition of the need for comprehensive cryptocurrency regulation, not just in the UK but also within the global arena.
As the proposed bill now stands in its final stage, it includes a thorough examination of potential amendments and awaits the prestigious Royal Assent.
Its primary focus remains to combat crimes associated with cryptocurrency. The House of Lords has introduced new amendments, notably the “failure to prevent fraud” clause. This innovative addition widens the circumstances under which an entity can be deemed responsible for committing an offense, either directly or through its staff, for its gain.
A relevant body is also guilty of an offense under subsection (1) if—
“an employee of the relevant body commits a fraud offense intending to benefit (whether directly or indirectly) the relevant body, the fraud offense is committed in a financial year of a parent undertaking of which the relevant body is a subsidiary undertaking (‘the year of the fraud offense’), and the parent undertaking is a relevant body which is a large organization.”
A Transformative Legal Framework
The bill does not stop there. It encompasses provisions that empower local authorities with the ability to freeze cryptocurrency assets linked to criminal activities. This progressive move has been widely lauded for dismantling the barriers have long impeded thorough investigations.
This legislation not only prevents wrongdoers from swiftly transferring flagged assets beyond the reach of UK jurisdiction but also presents the potential to infuse substantial funds into the public treasury. Notably, the bill eliminates the requirement for an arrest warrant before law enforcement can seize flagged digital assets in criminal cases.
Empowering Local Authorities
Phil Ariss, Director of the UK Public Sector at TRM Labs, commended this pivotal move, stating, “One area where this will be used is when assets have been identified, significant links to criminality can be proven, but the subject of the investigation is unlikely to face justice in the UK. Think of those committing fraud outside of the UK while targeting UK residents.”
Furthermore, the bill encapsulates civil forfeitures as a powerful tool against crypto-linked illicit activities. This provision empowers authorities to seize cryptocurrencies associated with wrongdoing, even in the absence of a criminal conviction.
The creation of a crypto asset-specific civil forfeiture power represents a crucial step in mitigating the risks posed by individuals who evade prosecution but continue to employ their funds for criminal or even terrorist purposes.
As the Economic Crime and Corporate Transparency bill approaches the threshold of approval, the United Kingdom is poised to strengthen its defenses against crypto-related crimes. With the authority to prevent, investigate, and confiscate assets associated with financial wrongdoing, the UK is taking a decisive step towards ensuring a safer and more transparent financial landscape for all its residents. This innovative legislation serves as a beacon of hope in the ongoing battle against crypto-related criminality, setting a precedent for jurisdictions worldwide.