Legal background Cryptoassets
The UK’s asset recovery legislation (contained in POCA) has not kept pace with the rapid development and evolution of cryptoassets and associated technology. Cryptoassets are a form of property that can typically be used to store or transfer value by secure means. The Government intends to introduce new powers to make it easier for law enforcement agencies to seize, detain and recover cryptoassets in more circumstances than at present.
	Broadly this involves reforming criminal ‘confiscation’ powers in Parts 2, 3, and 4 of POCA to enable law enforcement agencies to recover cryptoassets (intangible items) in a broadly similar way provided for tangible property, so that those assets can be confiscated at a later date. This principally involves expanding the search, seize and detention powers to make it explicitly clear that officers have the authority to recreate cryptoasset wallets (which are devices for storing cryptoassets: ‘recreating’ them is a way to gain access to those cryptoassets) and transfer assets into a law enforcement-controlled wallet. The reforms are reflective of existing powers being introduced well before the advent of cryptoasset technology and principally to cater for tangible assets such as cash.
	Further amendments will be introduced to Part 5 of POCA, which contains regimes for civil forfeiture of property (cash, certain listed assets and fund in accounts). Cryptoassets are not in scope of existing powers. The creation of a cryptoasset specific civil forfeiture power will mitigate the risk posed by those that cannot be prosecuted but use their funds to further criminality. These powers will be replicated in counter-terrorism legislation to ensure that law enforcement have the necessary tools and powers to effectively seize or freeze, detain, and forfeit cryptoassets which may be used specifically for terrorist purposes.