Economic Crime and Corporate Transparency Bill…. impact for crypto asset firms?
The UK Government announced new legislation on Thursday (here) giving new powers to law enforcement to “more effectively investigate, seize, and recover” the proceeds of crime within the cryptoasset ecosystem.
Background and key measures Announced:
The Economic Crime and Corporate Transparency Bill is currently at the second stage of reading (i.e., being debated) in the House of Commons and contains various measures to reform key parts of the Proceeds of Crime Act (2002). The focus of these changes is to widen the government’s power to deal with cryptoassets that are suspected or determined to be the proceeds of crime.
The reforms contain:
Amendments to criminal powers - Provisions to seize and recover assets, alongside powers for the courts to sell / destroy cryptoassets as required
Amendments to civil powers - Provisions to broaden the permissions of law enforcement to allow more agencies to be able to recover cryotassets without the requirement to obtain permissions from the High Court
Impact:
The Government’s rhetoric around crypto seems to have shifted lately, with the Business Secretary keen to say that “the UK is open for legitimate business only”. This marks a slight pivot from the rhetoric of John Glen (former Economic Secretary to the Treasury) and Rishi Sunak (former Chancellor), the latter of who wanted Britain to be the “global hub” for crypto in April. Since August, alongside the progress of this Bill, we have seen the increased powers for the FCA to publish decision notices when rejecting authorisation applications from crypto firms (here), further encouraging firms to withdraw applications that are not deemed to meet the regulatory standards. This is a theme we have seen through our work with the regulator and firms in this sector.
The main takeaway for firms to understand is that these extended powers and focus suggest that production orders will likely be received by firms for crypto assets and these are now expected to become more common.
Our conclusion therefore is that under the new government, crypto will continue to be a focus for continual evolvement and cautious development but at present, the bill raises no immediate impacts to regulated FIs.
