The UK Home Office and HM Treasury released a revamped economic crime plan to tackle financial system abuse and elite corruption. According to the document’s foreword, it’s the first time “the government, law enforcement, supervisory agencies and the private sector jointly developed and delivered an ambitious range of activities as part of a shared strategy.”
The Economic Crime Plan 2 (ECP2) is a follow-up to the first Economic Crime Plan implemented in 2019–2022. The strategy was intended as a system-wide response to economic crime. Its new incarnation comes with a stronger focus on dealing with the use of cryptocurrency in fraud, money laundering, and other types of financial crime.
According to the Plan, crypto assets are “an attractive technological enabler for criminal activity.” However, crimes involving digital assets remain under-reported, mainly due to the pseudo-anonymous and transnational nature of DLT-based funds as well as several other factors. The NCA’s National Assessment Centre estimates that illicit crypto transactions linked to the UK may have exceeded £1.24 billion in 2021, which amounts to about 1% of the total transaction value.
The plan goes on to announce the establishment of the new multi-agency crypto cell to combat the abuse of crypto assets. The new authority will include law enforcement and regulators to facilitate identifying, seizing, and storing illicit crypto assets. The revamped approach heavily relies on cooperation with the private sector, which will add to the resources and expertise to help identify criminal networks.
The plan is scheduled for three years and backed by £400 million and “475 new highly-trained financial crime investigators, spread across intelligence, enforcement and asset recovery at key agencies.” The financial goal is to recover an additional £1 billion in illicit assets over the next ten years.
The ECP2 approach aligns with the EU strategy of ramping up regulations around crypto transactions. This week, members of the European Parliament voted in favor of a draft bill limiting anonymous cryptocurrency transfers to €1,000.
