Schedules Schedule 9 – Cryptoassets: civil recovery Part 1 – Amendments of Part 5 of the Proceeds of Crime Act 2002 Chapter 3F: Conversion of cryptoassets
Section 303Z54 provides for detained cryptoassets to be converted into money, on application to a relevant court. Provision is made for two distinct applicants: an enforcement officer; or the person from whom the assets were seized. In deciding whether to make an order under this section, the court must have regard to whether the cryptoassets (as a whole) are likely to suffer a significant loss in value during the period before they are released or forfeited (including the period during which an appeal against an order for forfeiture may be made). Subsections (5) and (11) provide that any anyone likely to be impacted by a decision to convert cryptoassets into money must have the opportunity to consider the implications of such order and be able to make representations, if so desired, and the order must provide for affected people to be notified. Where the court authorises the conversion of cryptoassets, an enforcement officer is responsible for arranging for the proceeds to be paid into an interest-bearing account for safekeeping, until the conclusion of proceedings. Subsection (10) provides that if cryptoassets are converted into money after a forfeiture application under section 303Z41 has been made, but not yet decided, then the application is treated as having been made under section 303Z60. This means that the forfeiture application process does not have to re-start as a result of the conversion to money. Subsection (12) prohibits appeals against an order made for the conversion of cryptoassets.
	Section 303Z55 makes similar provision for the conversion of cryptoassets subject to a crypto wallet freezing order into money, on application to the relevant court. Provision is made for two distinct applicants: an enforcement officer; or the person by or for whom the crypto wallet is administered. Subsections (5) to (8) outline the process for conversion, if authorized by the court. The obligation to convert the assets, or arrange for their conversion, rests with the cryptoasset service provider that administers the wallet in question. Upon conversion, the cryptoasset service provider must then transfer the proceeds into an interest-bearing account chosen by the enforcement officer. The money will remain in the interest-bearing account until the conclusion of proceedings. Subsection (9) permits a cryptoasset service provider to deduct any costs it incurs in compliance with subsections (5) to (8).
	Subsections (1) and (2) of section 303Z56 makes provision for how forfeited cryptoassets are to be applied, if conversion takes place after forfeiture but before they are realised or destroyed. In those cases, the converted forfeited cryptoassets are to be applied in accordance with subsections (1) and (2) of section 303Z62. Subsections (3) and (4) ensure that the right of appeal in relation to a forfeiture order over cryptoassets is continued after a conversion and that a party may appeal instead under section 303Z61.
	Section 303Z57 provides the maximum period permitted for a judicial authority to detain the proceeds of converted cryptoassets. Subsection (4) authorises the freezing of the crypto wallet for up to a maximum of two years from date the cryptoassets were originally detained under Chapter 3C, except that under subsection (5) the freezing order may be extended up to a maximum of three years if the court is satisfied that a request has been made for evidence to be obtained from overseas (often referred to as "mutual legal assistance"), in connection with the cryptoassets, and that request is outstanding.
	Section 303Z58 makes provision equivalent to section 303Z57 for the detention of the proceeds of converted cryptoassets converted under section 303Z55.
	Section 303Z59 makes provision for the release of converted cryptoassets where a relevant court is satisfied that the test for detention can no longer be met.
	Sections 303Z60 to 303Z62 make provision for the forfeiture of converted cryptoassets.
	Section 303Z60 provides that a judicial authority may order the forfeiture of some or all of the proceeds of converted cryptoassets, if satisfied that the funds are recoverable property or intended for use in unlawful conduct.
	Section 303Z61 provides for a right of appeal against a forfeiture decision made under section 303Z60. The time-period for the lodging of an appeal is 30 days from the day that the court makes the order.
	Section 303Z62 provides for the order in which the proceeds should be realised.
	Section 303Z63 makes provision for the release of converted cryptoassets to their true owner.
	Section 303Z64 makes provision for a relevant court to award compensation in respect of assets detained under Chapter 3F. Where no forfeiture is made, the person from whom the cryptoassets were seized, or the person by or for whom the crypto wallet was administered immediately before the freezing order was made, may apply to the court for compensation, where the circumstances are exceptional.
	Section 303Z65 provides that the Director of Public Prosecutions or the Director for Public Prosecution in Northern Ireland may appear in proceedings on behalf of a constable or an accredited financial investigator, if asked to do so and if it is considered appropriate for them to do so.
	Section 303Z66 provides interpretation of the terms used in this Schedule.