Can UK law enforcement seize cryptoassets? – Part 2

Back in 2024, in our review of the novel features of the technology that underpins cryptoassets, we examined whether UK law enforcement can seize cryptoassets – the short answer is “yes”. Then we also looked into what can happen to cryptoassets that have been seized.

We can now observe the emergence of case law in respect of challenging the UK authorities’ powers to search, freeze and seize cryptoassets.

We will now look closer at one of the recent cases, The King (on the application of Faisal Zahoor Ahmad) and the Crown Court at Leeds and The Chief Constable of West Yorkshire Police [2026] EWHC 684 (Admin), where the novel features of the technology underpinning cryptoassets resulted in some interesting aspects, which we will examine below.

What happened in this case?

In light of an investigation against the Claimant for money laundering, a Judge at Leeds Crown Court issued search and seizure warrants for the Claimant’s residential home and vehicles. At the same time, the Judge granted an application pursuant to section 47G of Proceeds of Crime Act 2002 (“POCA”) for authority to seize items that might be available to satisfy a future confiscation order, including cryptoassets.

The matter under investigation concerned an original purchase of Bitcoin which was allegedly made with the proceeds of a VAT fraud and therefore amounted to money laundering. Consequently, “Operation Hammer” was conducted in respect of the purchase of 261 Bitcoin by the Claimant in 2015.

The Claimant sought judicial review of the Judge’s decision on grounds of (i) whether there were reasonable grounds to suspect that the Claimant had committed a money laundering offence, (ii) whether the warrants failed to define what could be seized with the necessary degree of particularity and (iii) whether the granted 47G POCA approval to seize cryptoassets was unlawful.

The emergence of cryptoasset-related issues and main takeaways

Although some of the grounds (e.g. not reaching the relevant threshold and committing material failures in duty of candour) are equally applicable to non-cryptoasset cases, the novel features of the technology underpinning cryptoassets have caused some interesting issues to be examined.

The Claimant obtained a cryptocurrency analysis report (i.e. a blockchain tracing report) regarding the provenance of the Claimant’s Bitcoin holdings and argued that the applications had been made prematurely, before conducting a proper enquiry into the original purchase of the bitcoin. This argument has ultimately failed. Due to the transparency of the blockchain, it is often possible to obtain a report of cryptoasset transactions.   

Although in his reasoning the Judge admitted that “I cannot say I understand Bitcoin”, it was held that based on his comments he had clearly understood the thrust of the application and the basis of alleging a reasonable suspicion of money laundering. As we have previously examined, this is not the first time that allegations were made in respect of using new technologies to in old criminal schemes.

An argument that a Production Order would have been sufficient in this case, was rejected partly on the basis that the proceeds of criminal activity were held in cryptoassets, which can be easily and swiftly moved beyond the reach of regulators or law enforcement (particularly if they are held in un-hosted wallets). Due to the borderless nature of the underlying technology, cryptoassets can be more easily dissipated than other assets.

At the time of purchase, the 261 Bitcoin were worth approximately £41,000, and by the time of seizure their value increased to millions. Massive price fluctuations is a common feature of cryptoassets.

Another argument by the Claimant stating that the section 47G approval (including to seize cryptoassets for the purpose of confiscation) was irrational and unlawful given the issuance of section 352 warrants, was rejected on the basis of there being no overlap as the restraint order under section 41 of POCA was not issued at the date of these orders. In any event, section 47G approval can be granted irrespective of whether a restraint has or has not been made.

Amendments to search and seizure powers

As we have previously discussed, amendments to the POCA search and seizure powers have ultimately broadened the authority to address novel features of the technology underpinning cryptoassets.

Specifically, the new powers permit not only the seizure of cryptoassets, but also of items of free property if officers believe they may hold information which may lead to the seizure of cryptoassets.

In summary, the amendments permit:

• The powers of seizure to be used in some circumstances before an individual has been arrested in order to prevent the dissipation of cryptoassets.
• An enforcement officer to search premises, vehicles and persons for cryptasset-related items.
• The seizure of a cryptoasset by transferring it into a crypto wallet controlled by the appropriate officer.
• The appropriate officer to detain for 48 hours any cryptoasset-related item or any cryptoasset.
• By Court order, the continued detention of a cryptoasset-related item or any cryptoasset for up to a maximum of two years (which can be extended to three years, where there is an outstanding request for evidence from overseas); and
• The destruction of cryptoassets in circumstances where their recirculation would facilitate criminal conduct by any person.

Building on the above, for circumstances where an officer has information that enables them to trace cryptoassets to a centralised service provider, the officer can now apply to freeze the cryptoassets stored on a centralised exchange.

Additional powers against centralised service providers such as crypto-exchanges and custodian wallet providers

A key to equipping law enforcement with the tools to seize and recover cryptoassets is to provide them with powers to take actions against centralised intermediaries (such as exchanges and custodians), where cryptoassets are exchanged and/or stored in a centralised entity.

UK law enforcement authorities can now apply for a Crypto Wallet Freezing Order (“CWFrO”), which is a Court Order to freeze some or all of cryptoassets held in a crypto wallet administered by a UK-connected cryptoasset service provider.

We have explored CWFrOs in detail in our blog:

What is a crypto wallet freezing order?

How to respond to a Crypto Wallet Freezing Order or a Crypto Wallet Forfeiture Order

A CWFrO may be made with or without notice; as such, the first time you may become aware of a CWFrO is when you are notified that one has been granted.

Applying for a CWFrO, and if applicable a CWFO, involves the relevant agency taking a staged approach, and it is important to adopt a strategic response accordingly.

As such, the most effective response will often involve a combination (or all) of the following (non-exhaustive) steps:

• Engaging with the relevant agency;
• Attending an interview (if appropriate);
• Making written representation accompanied by evidence;
• Trying to establish that there are (or were) insufficient grounds to persuade the Court to grant the CWFrO and/or that there are insufficient grounds to persuade a Court to grant a CWFO; and
• Establishing any procedurally incorrect actions taken by law enforcement.

Given the higher standard of proof which law enforcement need to satisfy at the CWFO stage, it may be better for the account holder to contest the matter at this stage.

It is critically important that the appropriate steps are taken during the investigation stage, as these should bolster representations made if the matter does end up at a full forfeiture Court hearing. Therefore, early expert legal advice is always recommended.

It is also important that those who claim a right of ownership over cryptoassets frozen in the wallet seek expert legal advice as soon as possible.

Gherson’s white-collar crime team combines expertise from both sides of the fence, relying on experience of leading investigations into financial crime and also representing individuals subject to such investigations. As such, we are able to offer a bespoke and insightful strategy providing our clients with the best chance to head-off any investigation as quickly as possible.

Increased reports of crypto fraud and scams – more from Gherson

The team have previously written a blog entitled “What to do if you think you have fallen a victim of a crypto fraud or scam”. This followed our earlier article entitled “What can you do to avoid a crypto fraud of scam?” and an article entitled “What to do if your NFT has been stolen”.

Criminal investigations and litigation

Gherson’s solicitors criminal litigation, regulatory and investigatory team combine an expert knowledge of criminal and regulatory law underpinned by a firm understanding of digital assets and blockchain technology. As such, the team are able to provide expert strategic advice to anyone wanting to investigate and pursue a potential theft of cryptoassets.

The team are also able to provide advice to anyone facing investigation in relation to any allegation of criminality involving cryptoassets.

NAVIGATING FINANCIAL INSTITUTION-RELATED CHALLENGES

What can I do to try and challenge a wrong decision to close my personal and/or corporate bank account(s)

In the meantime, we are often approached by individuals who have been “de-banked” in circumstances where they are adamant that they have always acted in full compliance with the relevant bank account’s Terms and Conditions and all other legal and applicable rules and regulations.

We have previously written about how other issues individuals may face, including account closures, are not limited to political figures in the UK and affect many thousands of lawful individual and business customers every year.  These cases have exposed the difficult balance many financial institutions and their individual and business customers must navigate to gain and maintain access to basic banking services.

To assist those whose accounts have been closed, Gherson’s Financial Crime, Investigations and Regulatory team have previously written blogs titled:

• “Why has my bank account been closed?”
• “Why has my business bank account been closed?”
• “140,000 SMEs “de-banked” last year – why could I have been de-banked?”
• “What are the proposed new laws aimed at preventing de-banking?”
• “Why the proposed new laws to try and prevent de-banking do not go far enough”.
• “Am I entitled to a basic bank account in the UK?”
• “How to challenge crypto-related bank account closures”
• “De-banking and crypto – will the landscape be positively changed by the introduction of new rules for both?”

What can I do to challenge a wrongfully imposed CIFAS marker

In addition, we receive a growing number of enquiries from individuals who feel that a financial institution has wrongly imposed a CIFAS marker in their name.

If you have always acted in full compliance with the relevant bank account’s Terms and Conditions and all other applicable legal rules and regulations, then you should have a good basis to challenge the bank’s decision to implement a CIFAS marker in your name.

A strong challenge will often involve demonstrating through evidence that you have not breached the bank’s Terms and Conditions or any rules and regulations, and that all transactions were at all times fully compliant with all applicable laws and regulations.

In a previous blog we have examined what a CIFAS marker is, and how to get it removed as well as what you can do if a CIFAS marker has been wrongly imposed.

We have also examined the ways to challenge a crypto-related CIFAS marker.

Adverse Information on Compliance Databases

We regularly receive enquiries from individuals who believe that incorrect and/or inaccurate data held about them on compliance databases is having an adverse effect on their relationship with financial institutions, leading to issues such as bank account closures and difficulties in opening a bank account.

We have also written a series of articles on a general overview of the main functions of compliance databases such as World-Check, and explained how to correct information about yourself on such databases.

HOW GHERSON CAN ASSIST

Gherson’s Regulatory, White-Collar Crime and Investigations team are highly experienced in assisting clients whose bank accounts have been frozen or closed. This includes submitting a request under data protection legislation, otherwise known as a Data Subject Access Request, to ascertain what information banks and other financial institutions may be holding about our client, and to understand their decision making; and then analysing their response and assisting with any appropriate challenge.

If you would like to speak to us in respect of any of the issues raised in this article or about your specific circumstances, do not hesitate to contact us for advice, send us an e-mail, or alternatively, follow us on X, Facebook, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice.  Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position.  Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog.  For formal advice on the current law please do not hesitate to contact Gherson.  Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

©Gherson 2026