Crown Prosecution Service provides data on confiscation orders relating to sums in digital currencies

Maria Nikolova

The CPS has obtained one confiscation order to the value of £2.2m, of which approximately £26,000 (1% of the total) is held in a digital currency, according to Lord Keen of Elie.

stealing leads

The UK Government has shed some light on the confiscation orders involving sums in digital currencies. The information was provided in response to a question from Lord Harris of Haringey who asked whether any confiscation orders have been made under the Proceeds of Crime Act 2002 relating to sums held in digital currencies; and if so, whether those orders required payment in the relevant digital currency or in pounds sterling.

On November 27, 2017, Lord Keen of Elie gave an answer to the question.

According to him, the Crown Prosecution Service (CPS) has obtained one confiscation order to the value of £2.2 million, of which roughly £26,000, or 1% of the total, is held in a digital currency. The confiscation order must be paid in pounds sterling.

The Serious Fraud Office (SFO) has not obtained any confiscation orders of this type. Other prosecutors outside of the CPS and SFO have powers to obtain confiscation orders but data for those prosecutors is not known.

In addition, the CPS has successfully obtained 5 restraint orders where the assets restrained include digital currency. The CPS has obtained ancillary orders from the Crown Court to make those restraint orders more effective by requiring suspects or defendants to repatriate digital currencies held abroad to the UK, to disclose the full particulars of digital currencies held and to allow the digital currency held to be converted to a flat currency, namely pounds sterling.

The CPS is now considering the execution of a mutual recognition request from an EU Member State, which has sought recognition of a freezing order over digital currency held in digital currency exchange accounts.

The information is provided about a month after the UK authorities voiced their concerns about the role of digital currencies for enabling cyber crime. These concerns are highlighted in a report entitled “National risk assessment of money laundering and terrorist financing 2017”.

In particular, digital currencies often facilitate victim payments to cyber criminals. This includes malware attacks such as ransomware, and cyber crimes-as-an-extortion, in which victim ransom payments are predominantly requested to be paid in Bitcoin. Digital currencies boost the growth of cyber crime-as-a-service and play a vital role in laundering the proceeds of cyber-dependent crime, directly facilitating cyber criminal financial flows.

The report also refers to an analysis of suspicious activity reports (SARs) submitted between May 2016 and July 2017. The analysis shows 1,584 of these reports referred to digital currencies, with the number of reports increasing month-on-month. Of these SARs, a number indicated that the suspicion was raised because of the involvement of digital currencies, rather than any suspicion of money laundering or terrorist financing.

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