In order to combat fraud and money laundering, the UK authorities have introduced a new law. The bill also addresses a few features of cryptocurrency.
The government said Thursday that the UK has tabled a bill to make it simpler for law enforcement authorities to confiscate, freeze, and reclaim cryptocurrency assets when they are used for illegal activities including money laundering, drug trafficking, and cybercrime.
The Home Office, Department for Business, Energy & Industrial Strategy, Serious Fraud Office, and Treasury presented the 250-page Economic Crime and Corporate Transparency bill, which extends beyond cryptocurrency and was first promised in May. The House of Commons had its first reading on Thursday, and the second reading is slated on October 13.
Graeme Biggar, director general of the National Crime Agency, stated in the statement that “domestic and foreign criminals have for years laundered the profits of their crime and corruption by misusing U.K. corporate structures, and are increasingly employing cryptocurrencies.” “These reforms—long overdue and warmly welcomed—will aid in our efforts to stifle both.”
The Economic Crime and Corporate Transparency Bill
The Economic Crime and Corporate Transparency Bill alters several aspects of how a company must be established in the United Kingdom. Among other changes, those who form a corporation in the U.K. will need to confirm their identities.
One of those changes is that the Companies House will have additional authority to oversee the formation of new companies. This entails having the ability to cross-check data with both public and private partners and to alert security and law enforcement to suspect conduct.
The measure would provide law enforcement the ability to confiscate, freeze, and reclaim cryptocurrency holdings. More cryptocurrency assets have been seized in the U.K. over time as the country’s crypto regulations tighten.
UK Authorities Want to Regulate the Cryptocurrency Sector
The authorities have not been helpless even without the law. Following a 114 million pound haul in June, the London Metropolitan Police recovered a record 180 million British pounds (US$200 million) in cryptocurrency related to international money laundering in July of last year, according to the BBC.
The Economic Crime (Transparency and Enforcement) Act, which enabled regulators to impose sanctions on Russia and freeze related assets there, served as a foundation for the new legislation. Regulators are worried that some Russians are using cryptocurrencies to get around the restrictions put in place after their invasion of Ukraine. Early this month, the Treasury amended its instructions to follow other countries’ lead and require cryptocurrency exchanges and wallet providers to disclose suspected sanctions violations. Both the United States and the European Union made it clear that crypto is covered by their sanctions policies.
The European Union is also working diligently to provide a comprehensive framework for the cryptocurrency sector. The MiCA measure, which is in the EU, is getting closer and closer to being adopted. Although it partially addresses NFTs, the measure places a strong emphasis on stablecoin regulation and consumer protection.
It’s hardly unexpected that it covers more as the EU has worked on the crypto legislation law for a much longer period of time. Additionally, the area has placed far greater emphasis on general consumer safety than only in the crypto industry.
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