UK police recovered approximately $671,000 (£520,000) in crypto that was fraudulently obtained from an 80-year-old man, in what lawyers involved with the retrieval are describing as a British first under the Proceeds of Crime Act 2002.
The police, in cooperation with Edmonds Marshall McMahon & 5SAH as well professional service company Grant Thornton were able trace the stolen crypto by using wallet addresses given to them by Mr A, the victim.
It was legal to use the Proceeds of Crime Act of 2002. This act, amended in October 2023 to include a crypto section, allows victims of cryptocurrency frauds to ask for funds to be released from wallets where freezing orders were placed.
Authorities were able prove that fraudsters had converted the Bitcoin into USDT and transferred it to a “overseas” exchange account.
A UK court based on these facts ordered that the crypto defrauded be returned to the country in accordance with the revised Proceeds of Crime Act.
The Language of Speaking Decrypt, Ashley Fairbrother—a partner at London-based Edmonds Marshall McMahon—explained that it was the manner in which the assets were recovered that makes the case “groundbreaking” from a British legal perspective.
The Police are empowered to order crypto wallet freezing under the new legislation of the Proceeds of Crime Act (specifically section 303Z51), he explained. The law allows for victims to recover stolen property once the order is in place.
At least $7.7 million (£6 million) in misbegotten crypto has now been retrieved by British police using the new crypto freezing orders, according to data from the HM Courts & Tribunals Service.
Fairbrother further explained that retrieval occurs in the civil courts but not the criminal ones, which is unusual to the UK. It also takes lawyers who have “very specific expertise” for it to be done correctly.
In his view, the “legislation is a significant step forward—an innovative legal framework that streamlines the asset recovery process, provided there is constructive cooperation between the Police and victims.”
It is here that the police in UK may be uncertain as to how much assistance they should provide for victims, beyond criminal investigations.
“But if the Police are willing to collaborate closely with victims and their legal representatives, as was the case here, this new legislation could be the silver bullet to addressing cross-border crypto fraud on a much larger scale in this country,” Fairbrother added.
Fairbrother reports that Edmonds McMahon anticipates a more regular retrieval of crypto in the UK.
According to him, given the nature of public blockchain ledgers and their uniqueness, recovering crypto assets can be much easier than traditional asset recovery.
Fairbrother suggests “dedicated cyber pursuit teams” would be beneficial to the forces.
Fairbrother, despite these challenges is confident that the recent case will mark the beginning of a new phase for crypto-law enforcement in the UK.
He stated, “With the right resources in place and with a team dedicated to recovery, and clear instructions, it could serve as a significant catalyst for improvement and make this a routine process.”
Stacy Elliott is the editor.
