Schedules Schedule 10 – Cryptoassets: Terrorism Part 1 – Amendments to Schedule 1 to the Anti-Terrorism, Crime and Security Act 2001 Part 4BD: Conversion of Cryptoassets
This Part provides for "converted cryptoassets" defined under new paragraphs 10Z7DC and 10Z7DD, and for "relevant financial institutions" to have the same meaning as in Part 4B (paragraph 10Q) of Schedule 1 to ATCSA.
	Paragraphs 10Z7D to 10Z7DL provide for detained or frozen cryptoassets to be converted into money (cash or money held in an account maintained by a relevant financial institution), on application to a relevant court. Provision can be made by two distinct applicants: an authorised officer or the person from whom the cryptoassets were seized.
	Paragraph 10Z7DA provides that the court must consider whether the cryptoassets (as a whole) are likely to suffer a significant loss in value while they are frozen or detained. Anyone who may be affected by a decision to convert cryptoassets into conventional currency must be able to make representations, if so desired, and the order must provide for affected persons to be notified. Where the court authorises the conversion of cryptoassets, an authorised officer is responsible for arranging for the proceeds to be paid into an interest-bearing account for safekeeping, until the conclusion of the proceedings.
	Paragraph 10Z7DB provides that if the cryptoassets are subject to a crypto wallet freezing order, the obligation to convert the cryptoassets, or arrange their conversion, rests with the UK-connected cryptoasset service provider that administers the crypto wallet in question. Upon conversion, the UK-connected cryptoasset service provider must then transfer the proceeds into an interest-bearing account chosen by an authorised officer, where it will remain until the conclusion of proceedings. The UK-connected cryptoasset service provider can deduct any reasonable expenses it incurs in compliance with these provisions.
	Paragraph 10Z7DC provides that if cryptoassets are converted into conventional money, the cryptoassets themselves should no longer be treated as being detained under Part 4BA. The converted assets will be treated as detained instead, and any application in relation to the cryptoassets which has not yet been determined or otherwise disposed of, is to be treated as if the application was made in relation to the converted cryptoassets. This means that the forfeiture application process does not have to re-start as a result of the conversion to money.
	Paragraph 10Z7DD provides that a request to convert cryptoassets into conventional money can be made at any stage of the forfeiture proceedings, and before the cryptoassets are realised or destroyed. The right of appeal in relation to a cryptoasset forfeiture order would continue after the cryptoassets have been converted. This paragraph also provides for a court to permit the detention of the proceeds of the converted cryptoassets for up to two years from the date the cryptoassets were originally detained under Part 4BA. It can authorise the detention to be further extended up to a maximum of three years if the court is satisfied that a related international request for assistance in obtaining evidence is outstanding.
	Paragraph 10Z7DF provides that if a relevant court is no longer satisfied that there are reasonable grounds for suspecting that the converted cryptoassets are terrorist cryptoassets it may order the release of the converted cryptoassets.
	Paragraph 10Z7DH provides that any appeal against a forfeiture decision, by law enforcement or a person aggrieved by the order, must be lodged within 30 days except in de-proscription cases (made under paragraph 10Z7DI). An appeal against a forfeiture decision must be made before the end of a 30-day period, starting with the day on which the court makes the order.
	Paragraph 10Z7DJ provides that reasonable expenses incurred by an authorised officer should be covered by any converted cryptoassets that have been detained and forfeited, and by any accrued interest on them. Reasonable expenses constitute the safe storage, conversion, or detention of the assets. The remainder should be paid into the Consolidated Fund or, in Scotland, the Scottish Consolidated Fund. Any converted cryptoassets should not be released before the end of the period within which an appeal may be made (30 days) and not before the outcome of the appeal has been determined, should an appeal be made.
	Paragraph 10Z7DK provides that any or all converted cryptoassets may be released to any victim by application if it appears to the court that they were deprived of the cryptoassets to which the application relates; deprived by criminal conduct of the property which the cryptoassets represent; if the cryptoassets were not obtained by or in return for criminal conduct; or the cryptoassets belong to the applicant immediately before they were seized or the crypto wallet freezing order was made in relation to the crypto wallet in which the relevant cryptoassets were held.
	Paragraph 10Z7DL provides that, in respect of converted cryptoassets detained under this Part, an affected person may apply to the court for compensation in exceptional circumstances.