Expanded Seizure Powers — The ECCTA 2023
The Economic Crime and Corporate Transparency Act 2023 gives enforcement officers the power to seize crypto-asset related items — including hardware wallets, mobile devices, and seed phrases — without first making an arrest. If an officer is lawfully on premises and has reasonable grounds to suspect property is criminal, they can take control of it immediately. Where an asset is a privacy coin or is otherwise harmful to the public interest, authorities have statutory power to destroy the asset entirely.
Crypto as Legal Property — The Property (Digital Assets etc.) Act 2025
The 2025 Act confirmed that digital assets are objects of personal property rights under English law. Courts can now grant proprietary injunctions and worldwide freezing orders with greater ease. Where assets are held on a centralised exchange, a single court order can freeze accounts globally within minutes. Challenging such orders requires evidence of the legitimate source of funds, which specialist forensic blockchain analysis can help establish.
Civil Forfeiture Without Conviction
The state can apply to forfeit cryptocurrency through the Magistrates' Court as a civil matter, without first securing a criminal conviction. The standard of proof for civil forfeiture is the balance of probabilities — lower than the criminal standard. This means assets can be permanently lost even where no prosecution follows.
HMRC and the Crypto-Asset Reporting Framework
Under the OECD CARF, UK-based crypto-service providers are legally required to share data on users directly with HMRC — including names, addresses, and total transaction values. HMRC uses this data to identify discrepancies between reported income and exchange activity. Where a discrepancy is identified, failure to respond appropriately to an initial nudge letter can escalate into a formal tax investigation.
What to Do if You Are Under Investigation
If your digital assets have been seized, you have received a production order, or you are under investigation in connection with cryptocurrency, seek specialist legal advice immediately. Do not provide access to wallets, devices, or seed phrases without first consulting a solicitor. Early intervention is particularly important given the authorities' power to permanently destroy certain categories of asset.