Cryptoassets could be seized to stop crime, UK government says

By Huw Jones

LONDON (Reuters) – Cryptoassets could be seized to help combat economic crime, Britain’s government said on Thursday, but its proposal stopped short of the radical overhaul called for by lawmakers who want a single crime-busting agency.

Banking and online scams have rocketed in Britain, particularly since the COVID-19 pandemic.

The government said in its response to a parliamentary inquiry into economic crime that it will bring forward legislation to enable cryptoassets to be seized and recovered more quickly, as soon as parliamentary time allows.

“In particular, (we propose) the creation of a civil forfeiture power which would mitigate the risk posed by those that cannot be prosecuted but use their funds to further criminality,” the government told parliament’s Treasury Select Committee.

The inquiry had recommended a single body for tackling economic crime to replace a “bewildering” number of agencies, but the government said its multi-agency approach was the right one.

“It enables us to differentiate between different crime types,” the government said, adding that fraud in the public sector needed a different response to scams committed by people or businesses.

“This may be a significant missed opportunity,” TSC Chair Mel Stride said in a statement.

The government has already backed a recommendation to require online platforms like Google and Facebook to proactively tackle fraudulent advertising for financial products, but it will take time to pass and implement the legislation.

“Online platforms must now step up and urgently take down these fraudulent adverts,” Stride said.

Google has already agreed to take financial promotions only from companies regulated by the Financial Conduct Authority, with Facebook owner Meta due to follow suit this year.

The inquiry recommended forcing online platforms to help compensate customers hit by scams, a step the government is not ruling out.

“We are working closely with technology companies and partners in law enforcement and civil society to consider every possible option to support victims of online fraud and to mitigate the harm that they have experienced,” the government said.

(Reporting by Huw Jones, Editing by William Maclean)