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NCA creates new team fight Crypto Fraud

Posted on 18 January 2023

Cryptocoin bitcoin

As Cryptocurrency becomes ever-more ubiquitous, so too does the prevalence of crypto-related fraud. According to Action Fraud, the UK's national reporting centre for fraud and cybercrime, crypto fraud increased by a third in the UK in 2022, with £226 million stolen from investors in the year to 30 September.

The NCA recently announced, within an advertisement for a vacancy posted online, that it will create a new "Crypto Cell" that will be dedicated to targeting bad actors concerned with cryptocurrency in the UK. The advertisement goes on to say that the Crypto Cell, which will initially contain five officers, will support new and existing investigations where speciality cryptocurrency experience is required, as well as proactively identifying targets for investigation.

The NCA's move comes at the same time as the Economic Crime and Corporate Transparency Bill is debated. The Bill is aimed at cracking down on fraud and money laundering by, amongst other measures, expanding law enforcement authorities', including the NCA's, ability to seize, freeze and recover crypto assets used for illicit purposes. The addition of these powers will undoubtedly be invaluable for the NCA as it seeks to focus on tackling this issue.

Cryptoassets have presented regulators and enforcement agencies with many different challenges. The FCA for example currently only supervises cryptoasset businesses for AML purposes but does not yet have the power to regulate them. This lack of regulation and the nature of cryptoassets themselves have raised concerns about the threat that cryptoassets pose to market stability and their susceptibility for use in fraud and money laundering.

Much of the litigation to date involving cryptoassets in the UK has been civil in nature. However, the NCA's recent move and proposed legislative changes demonstrate a commitment to respond more comprehensively to the rise in crypto fraud and which will likely result in an increase in criminal investigations involving cryptoassets and enforcement in this area.

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