The United Kingdom’s House of Lords has advanced the Economic Crime and Corporate Transparency bill to its final stages of approval. This bill, initially introduced in September 2022, seeks to enhance the authorities’ abilities to confiscate proceeds from financial crimes, including those involving cryptocurrencies.
Over the past year, the bill successfully navigated through all five stages in both the House of Commons and House of Lords. This progress aligns with the growing need for comprehensive cryptocurrency regulation in the UK and various other jurisdictions.
The proposed legislation has now reached its ultimate phase, which involves reviewing amendments and securing Royal Assent.
“A relevant body is also guilty of an offense under subsection (1) if—
(a) an employee of the relevant body commits a fraud offense intending to benefit (whether directly or indirectly) the relevant body,
(b) the fraud offence is committed in a financial year of a parent
the undertaking of which the relevant body is a subsidiary undertaking (“the year of the fraud offense”), and
(c) the parent undertaking is a relevant body which is a large organization.”
In its efforts to combat crypto-related criminal activities, the House of Lords has put forth new amendments, notably the “failure to prevent fraud” clause. This provision broadens the circumstances under which an organization can be held accountable for an offense, whether directly or through its employees, for its own gain.
The bill also empowers local authorities to freeze crypto assets associated with criminal activities. It has garnered praise for eliminating unnecessary barriers that hinder effective investigations. Observers consider this bill a significant step forward in preventing malicious actors from quickly moving flagged assets out of the jurisdiction. Furthermore, it holds the potential to contribute millions of dollars to the public treasury.
Specifically, the legislation eliminates the requirement for an arrest warrant before law enforcement can confiscate digital assets flagged in criminal cases. Phil Ariss, the Director of the UK Public Sector at TRM Labs, commended this development, saying, “This will be particularly useful in cases where assets with significant ties to criminal activities can be identified, but the individuals under investigation are unlikely to face justice in the UK. Think of those committing fraud from abroad against UK residents.”
Civil forfeitures are also a key aspect of this bill, enabling the seizure of crypto assets connected to illicit activities, even in the absence of a criminal conviction.
“The creation of a crypto asset specific civil forfeiture power will mitigate the risk posed by those that cannot be prosecuted but use their funds to further criminality or for terrorist purposes.”