The UK government has unveiled a set of regulations targeting fraud and money laundering. A new law called Economic Crime and Corporate Transparency was introduced yesterday into Parliament. The bill gives the British authorities greater power to "seize, freeze and recover crypto assets" used for fraudulent activity.
According to the joint press release from Home Office and other involved institutions, the use of cryptocurrencies has notably increased in recent years, with the Metropolitan Police reporting a sharp rise in cryptocurrency seizures in 2021.
Quoted in the announcement, the chief of the National Crime Agency Graeme Biggar said: "Domestic and international criminals have for years laundered the proceeds of their crime and corruption by abusing UK company structures and are increasingly using cryptocurrencies. These reforms – long awaited and much welcomed – will help us crack down on both."
The bill is not aimed at cryptocurrencies in general, only assets used for illegal purposes, e.g. related to terrorist financing. The regulations reduce red tape around confidentiality liability. As a result, authorities will find it easier to persuade businesses to share information that may lead to fraud detection.
The crypto-related measures introduced by the Economic Crime and Corporate Transparency are the latest example of UK authorities' toughening up their stance on digital assets. At the end of August, the amendments expanding financial sanctions reporting requirements to crypto exchanges and custodial wallet providers (those who control users' private keys) came into force.
At the beginning of the same month, FCA declared a clampdown on the marketing of high-risk investments to consumers, including the promotion of qualifying crypto assets.
In July, Her Majesty's Revenue and Customs (HMRC) began seeking advice from the parties operating in the DeFi space to help the government decide how to tax DeFi lending and staking.
In June, Bank of England declared that stablecoins are not stable enough and require further regulations to be able to reach "systemic scale."
