UK House of Lords approves bill to confiscate stolen crypto

Check this out: There's this new law making its way through the UK that's all about going after stolen crypto. So, on the bright side, this law could really help in tracking down stolen coins from central exchanges and getting them back to the right owners. Like, did you hear about that CoinEX hack? Over 70 million bucks worth of crypto got taken. A law like this could make a big difference in situations like that. But then again, I'm a bit worried about the downsides. There’s a chance this law could be used to push through more invasive measures and mess with people's privacy. What do you guys think about this?

All these laws are developed only to strengthen control over citizens. I have not seen information that such laws helped return stolen funds to an ordinary citizen, and usually work in the interests of large companies. To get something back, an ordinary citizen needs to go through a lot of complicated procedures, which are sometimes more expensive than the value of the stolen coins. I have seen information from Americans that they do not take money from bankrupt exchanges because they do not want to fill out a lot of forms and go through checks with government agencies.

In the beginning, the laws are in favor of the public, but they quickly turn around to be the opposite, but I do not see how these currencies will be confiscated? I can understand some stablecoins and centralized tokens being asked to freeze coins (and they do) but it's very difficult with Bitcoin and Ethereum, and will that mean all users have to use CEXs as crypto wallet (any casual wallet) or what?

There can't be wrong in making crypto companies and users comply with transparency or anti-money laundering and counter-terrorism. Surely this is a good thing. The only thing that made me feel good about what FCA director Pritchard said was that crypto goes from niche to mainstream.  Something tells me that it all goes to a dystopian end which is no different from Chinese CBDC. Any transactions moving out from a private BTC wallet will be traced and if it goes to a centralized platform, that's when it gets seized for questioning.

I thought that bureaucracy only existed in our country and that it did not exist in developed countries!!! But I think they only intend that in Crypto. Maybe they will think about issuing such a law later, i.e. forcing all citizens to use CEXs and pass the KYC, but they will also fail because it is impossible to track all citizens to know whether they have a dishonest wallet or not. This is the worst scenario that I fear will happen, they will take complete control of the central exchanges and confiscate any anonymous transaction under the pretext that it may be stolen money.

To clear your doubts, read this: https://www.msn.com/en-us/money/other/only-3-of-bittrex-customers-claimed-their-assets-in-bankruptcy/ar-AA1gMozx "Why it matters: Distinct for its high number of low-balance accounts, the case serves to highlight that being a claimant in a crypto bankruptcy requires a good amount of effort and personal data — and for many, the reward may not justify the price." https://www.msn.com/en-us/money/companies/surprisingly-few-us-customers-want-their-bittrex-money-back/ar-AA1gFE9P "Bittrex, which filed for bankruptcy in May, could be left in profit as customers aren’t claiming their money"

I don't know the details of this and older laws, but I'd be surprised if they couldn't already seize funds coming from crimes. So it's just a clarification, and nothing big, right?

Criminals are not idiots either, and they don’t send their money to crypto exchanges. Criminals exchange stolen money from intermediaries for fiat or other pure cryptocurrencies. But when persecution of large crypto exchanges begins in a large country, we find out that Binance is a sponsor of global terrorism and cryptocurrency laundering Laws define work algorithms for all registered market participants and their responsibility for violating any legal requirements. This means that the commission for laundering stolen cryptocurrencies will increase, and honest users will also face many additional difficulties.

I never doubt what you say, I'm just surprised that this happens in an advanced civilized country like the United States. According to the link you mentioned: Frankly, I was surprised by the information because I thought this only happened in poor countries and third world countries, and I did not imagine it even happening in the United States.

I was reading the thread and all the time I was wondering the same thing until I read your answer. I am surprised they have to process and pass a law now for this. It's like if they process a law to be able to seize gold or money in online accounts, or paypal balances. I don't quite understand how this is supposed to answer LoyceMobile's question, which is the same question I have.

It's a great law and I honestly don't see much downside to it! It was concerning that such laws didn't exist till date but it's good that government are waking up and considering cryptos as a valuable asset so much so that they are bringing in a law to tackle the frauds. It's a positive development most definitely. Scammers should be penalized at all costs. The governments must set some examples of it. I believe with this law, such things will happen and the stolen cryptos will be recovered to be refunded to the rightful owners. UK is leading the way! We must appreciate such effort.

Have you read this law? Which articles do you like best? I have no interests in the UK, so I read: Factsheet: Economic Crime and Corporate Transparency Bill overarching https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-economic-crime-and-corporate-transparency-bill-overarching Make it stricter, create a register, give more confiscation powers, etc.. and all this will work primarily against British citizens. But this does not threaten criminals; they will exchange the stolen money on the darknet, and then legalize it in other countries.

In an ideal world that can be the case, but from how describe the law I don't think this is the thing that most people want. On the other hand, a clear law can also help people judge whether a law enforcement process is being abused or not, although I doubt this applies to the new law since there is no tool to monitor the process easily. At the end of the day, I don't see how it can improve user's ability to recover their stolen funds from criminal activity. I can see why though, probably because the government doesn't want people to scam them too. But yeah, the best thing to do is be careful and prevent yourself from using scammy services or falling for a scam easily.

It would be more correct to say, “Prevent yourself from using central services.” Because the problem is not in the use of fraudulent services, the problem is in the use of central services in the first place. There are many central platforms that are legally licensed, but they were hacked and people’s money was stolen. Recently, the CoinEx platform was hacked and more than $70 million was stolen, and yesterday the HTX exchange was hacked and $8 million was stolen as well. How will the new law protect these people who have been robbed? The hacker will resort to Non-KYC DEXs or the deep web to dispose of the stolen coins, and even if the police are able to pursue him and confiscate the money, investigations will begin into the sources of the users’ funds and most likely they will be confiscated. Therefore, in my opinion, this law is impractical on the ground and will not benefit users, but of course it will be useful to the government.

It is fine you have understood where they are driving to. The mission is to force everyone to the centralized system (CEXs), where everyone would be able to complete KYC, be effectively monitored and tasked. There will be a law prohibiting the use and existence of DEXs in order to complement the stolen crypto bill. I am trying to figure out how hard someone (innocent) will need to explain his/herself that their crypto is not stolen incase they are unjustly accused. Is UK house of Lords the highest law making body in the UK?

Let's not use CEXs. Who are these users? https://twitter.com/ArkhamIntel/status/1705254948324233270 "Arkham has now identified $25B of Coinbase Bitcoin reserves (~1M BTC) on chain. This makes Coinbase the largest Bitcoin entity in the world on Arkham, with almost 5% of all BTC in existence - about as much as Satoshi Nakamoto."

1 million Bitcoin out of users' pockets, of course. I found this chart about Coinbase users where Coinbase had 108 million users in 2022, up from 56 million people in 2021. This equates to 92.8% year-over-year growth.                               https://www.finder.com/coinbase-statistics Therefore, I see that all calls to stop using CEXs do not find any listening ears. The number of users doubles every year despite all these successive incidents.

I agree with you that this is a good step and it can be said that it brings crypto to the mainstream. But I do not think that one of the priorities of this decision will be to help users recover their money, especially since we do not know which users might be included and how the concerned authorities will do that. I believe that these are double-edged laws, since these laws will help the authorities impose more tracking measures against users. The American example is different from the British example because America had previously similar experiences and everyone was not completely satisfied with what happened.

How to buy Bitcoin and Ethereum in the UK https://cointelegraph.com/news/how-to-buy-bitcoin-and-ethereum-in-the-uk "Crypto exchange-traded funds (ETFs): An alternative to directly holding Bitcoin and Ether Exchange-traded funds (ETFs) provide diversified exposure to multiple holdings within a single investment, including cryptocurrencies like Bitcoin and Ether. Investment trusts pool investors’ funds through the sale of a set number of shares, which may have some initial trust-related challenges upon launch. This structure provides instant diversification and reduces risk compared to picking individual investments. Investors can now access multiple cryptocurrencies simultaneously through various firms. ETF providers such as Purpose Investments and VanEck offer opportunities for investors to engage in the crypto market." Are they spot or futures ETFs?

https://cointelegraph.com/news/uk-crypto-hodlers-get-a-call-from-the-tax-grinch "His Majesty’s Revenue and Customs (HMRC) has instructed crypto users in the United Kingdom to declare and pay their taxes on digital assets within a strict timeframe or face the consequences. HMRC guidance on how to declare and pay taxes on crypto holdings, published on Nov. 29, starts with a clear warning: “If you do not contact us to declare your unpaid tax, you could be liable to additional interest and penalties.”" https://www.gov.uk/guidance/tell-hmrc-about-unpaid-tax-on-cryptoassets Guidance "Tell HMRC about unpaid tax on cryptoassets Make a voluntary disclosure of any unpaid tax if you have income or gains from cryptoassets, including exchange tokens, NFT’s and utility tokens."