British police recover $671,000 with stolen code based on crime proceeds

British police recovered roughly $671,000 (£520,000) of fraudulent codes from an 80-year-old man.

In collaboration with law firm Edmonds Marshall McMahon and 5SAH, and professional services company Grant Thornton, police, A.

They legally utilized the Crime Profit Act in October 2002. This was amended in October 2023 to include a new crypto-related section, allowing victims of cryptocurrency fraud to apply for the release of funds from wallets where the freeze order is placed.

Mr A sent 9.1 BTC to a scammer pretending to be a exchange operator, allowing the authorities to establish that Bitcoin was converted to USDT by the perpetrator and sent to an “overseas exchange” account.

Based on this information, the UK court ordered the repatriation of fraudulent codes under the terms of the amended criminal law.

I’ll talk DecryptionAshley Fairbrother, a partner at London-based Edmonds’ Marshall McMahon, explained that making a “groundbreaking” claim from a UK legal standpoint is how the assets were recovered.

“The Crime Proceeds Act, particularly the recent law under Section 303Z51, gives police the authority to issue crypto wallet freeze orders,” he said. “This allows the victim to apply for recovery of the stolen property once such an order is in place.”

At least $7.7 million (£6 million) of false ciphers were obtained by British police using a new cryptographic freeze order, according to data from HM Courts & Tribunals Service.

Fairbrother also explained that the search process works within the civil system but operates in criminal courts, which is unusual for the UK, and requires that lawyers with “very specialist expertise” be properly carried out.

In his view, “Law is an important step and is an innovative legal framework that streamlines the asset recovery process as long as there is constructive cooperation between the police and the victim.”

However, this can present a challenge given that UK police may be uncertain about how much support they will provide to victims beyond specific criminal investigations.

“But if police are willing to work closely with the victim and their legal representatives, as in this case, this new law could be a silver bullet to address the country’s much larger cross-border crypto fraud,” Fairbrother added.

In fact, Fairbrother says that Edmonds’ Marshall McMahon hopes that searching for ciphers that have been used will become more routine in the UK.

He said, “Given the unique nature of the public distributed ledger of blockchain, it could actually be easier to recover crypto assets compared to traditional Fiat assets recovery.”

But while “critical” legislative work may be required to promote more cooperation between police and victims, Fairbrother also suggests that “creating a dedicated cybertracing team.”

Despite these challenges, Fairbrother is optimistic that this recent case marks the opening of a new phase in UK crypto enforcement.

He said, “There is more resources and dedicated teams in place, and with clear guidance, this could be a huge catalyst for improving recovery efforts and making it part of a more routine process.”

Edited by Stacy Elliott.