Key Takeaways
- In 2024, the U.K.’s Serious Fraud Office gained new powers to freeze and forfeit crypto.
- However, over a year later, it has yet to issue a single order.
- Meanwhile, the tax authority HMRC has led the way in utilizing the new legal instruments.
In 2023, the U.K.’s Economic Crime and Corporate Transparency Act introduced Crypto Wallet Freezing Orders (CWFrOs) and Crypto Wallet Forfeiture Orders (CWFOs).
But over a year since its new powers to freeze and seize crypto assets entered into force, the Serious Fraud Office (SFO) has yet to issue a single order.
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What Are Crypto Wallet Freezing and Forfeiture Orders?
The U.K. government created the new freeze and forfeiture orders because it concluded that existing frameworks were inadequate for crypto.
Orders are enforceable when crypto assets are stored with custodians, exchanges, or third-party providers that are subject to U.K. jurisdiction.
To prevent targets from moving their assets before freezes are enforced, CWFrOs can be can be obtained without notice if there are reasonable grounds to suspect crypto is tied to criminal activity.
New Legal Instruments Fail To Take Off
Authorities that are empowered to use the new legal instruments include police forces, the SFO, HM Revenue and Customs (HMRC), the Crown Prosecution Service, and the National Crime Agency.
However, in response to a Freedom of Information request by Gherson Solicitors LLP, the U.K.’s anti-fraud regulator acknowledged that it has neither sought nor obtained any CWFrOs or CWFOs.
Meanwhile, the U.K.’s tax authority reported that it had sought less than five of either order.
HMRC Takes the Lead
“By its nature, the SFO only investigates a few large and complex cases. This could be one of the reasons that the number of CWFrOs and CWFOs used by the SFO is currently nil,” observed Thomas Cattee, partner and head of the White-Collar Crime department at Gherson Solicitors.
Nevertheless, he said it is “perplexing” that the SFO has not sought any orders.
“HMRC are clearly more ready and adept to using these new powers,” Cattee added.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
