Cryptoassets – Challenging Asset Freezing Orders
Expert legal guidance on challenging crypto asset freezing orders under the Economic Crime and Corporate Transparency Act 2023. Protect your cryptocurrency investments and secure asset release.
What is an Asset Freezing Order?
An asset freezing order is an order obtained, in criminal cases, by the police and certified financial investigators from the courts. It authorizes them to attach assets.
An asset freezing order can also be obtained in a civil case when just cause is shown to the court. The court will supervise the freezing order until its determination.
Freezing cryptoassets became easier for the authorities when the relevant sections of the Economic Crime and Corporate Transparency Act 2023 came into force on 31 January 2024. This act extends the capability of the Proceeds of Crime Act 2002 by introducing new powers specifically designed for cryptocurrency assets.
What Does the Asset Freezing Order Affect
Crypto Trading Exchanges
Exchange cannot allow interaction with cryptoassets without court permission
Crypto Wallets
Access to crypto wallets is controlled by the courts
Physical Items
USB drives, hardware wallets seized by police subject to court authority
Impact of Freezing Orders
When an asset freezing order is obtained, it freezes the assets on either a crypto trading exchange or in a crypto wallet. It also allows physical assets such as a USB drive or memory stick to be seized. This means the crypto exchange cannot allow any interaction with the cryptoassets without permission from the courts.
What Challenges Can You Bring?
Court-Based Challenges
As the cryptoassets are held to the order of the court, the only route to seek their release is through the courts. You will need to mount a challenge to unfreeze the cryptoassets and to regain control over them.
Challenge Options Available:
Criminal Proceedings Strategy
In criminal proceedings, the owner of the cryptoassets will need to persuade the court that they are uninvolved in any criminal activity or wrongdoing. Even if the court does not unfreeze the order, you may be able to persuade it to release some part of the cryptoassets for living or business expenses.
Asset Freezing Orders Are Time Limited
It is important to be aware that asset freezing orders are time limited. Each extension requires court approval and provides opportunities to challenge the order.
Initial Order
Initial freezing order duration before court review required
First Extension
Standard extension period with court authorization
Maximum Duration
Maximum total time an asset freeze can remain in place
Extension Requirements
Justification Required
Those looking to extend the order must justify why keeping the order in place is necessary.
Representation Rights
On each occasion that an application for extension is made, those affected can make representation to the court seeking release.
Protect Your Cryptoassets from Freezing Orders
If your cryptocurrency assets are subject to a freezing order, our specialist team can help you challenge the order and regain control of your investments.
Specialist cryptocurrency freezing order defence lawyers with extensive experience in challenging asset freezes and securing releases.