Since May 2024, UK law enforcement agencies have been wielding new powers to freeze and seize cryptocurrency linked to suspected criminal activity through Crypto Wallet Freezing Orders (CWFrOs). With over £6 million in assets already frozen—including high-value holdings from major platforms like Coinbase—these orders are no longer theoretical. In this blog, we revisit the legal framework of CWFrOs, explore their growing use by UK authorities, and offer practical guidance for individuals and service providers who may be affected.
In May 2024, we wrote an article about the introduction of the Crypto Wallet Freezing Order (“CWFrO”) – a new power bestowed on UK law enforcement agencies enabling them to freeze and seize cryptoassets.
In terms of whether these powers have subsequently been used, the short answer is “yes”.
It has recently been reported by TronWeekly that since 2024, when the UK authorities were granted new powers to freeze and potentially seize crypto alleged to be linked to crime, £6 million have been frozen.
This includes a high-value crypto order from a Coinbase wallet.
In light of the law enforcement agencies’ growing use of CWFrOs, we now look back at exactly what these orders are and how to deal with them.
What is a Crypto Wallet Freezing Order?
A CWFrO is intended to work broadly in the same way as an account freezing order (“AFrO”) (which we discussed in a previous blog entitled – what is an account freezing order?), but addresses the unique features of the technology underpinning cryptoassets.
A CWFrO is an order made by a Court freezing some or all of cryptoassets held in a crypto wallet administered by a UK-connected cryptoasset service provider.
An CWFrO is therefore issued by a Magistrates’ Court (the “Court”). The Court will issue a CWFrO if a senior officer at a relevant agency (including the Serious Fraud Office, Her Majesty’s Revenue and Customs, the National Crime Agency or the Police) can persuade the Court that some or all of the cryptoassets held in the crypto wallet are:
- the proceeds of crime (either within or outside the UK), or
- intended for use in criminal conduct.
Reasonable grounds to suspect that cryptoassets are the proceeds of crime
For a CWFrO to be granted, the relevant agency must persuade the Court on the balance of probabilities (i.e. more likely than not) that there are reasonable grounds to suspect that some or all of the cryptoassets held in the crypto wallet administered by a UK-connected cryptoasset service provider are the proceeds of crime or are intended for use in criminal conduct. Usually, this is not a significant obstacle for law enforcement to overcome. The evidence which law enforcement needs to provide the court at this stage is very limited.
An application for a CWFrO may be combined with an application for an AFrO where a single entity is both the relevant financial institution for the AFrO and the UK-connected cryptoasset service provider and operates or administers for the same person.
Length of CWFrO
If the Court does grant a CWFrO, then the cryptoassets in the crypto wallet can be frozen for up to two years. This is to give the relevant agency time to investigate the legitimacy of the cryptoassets in the crypto wallet. However, in recognition of the borderless nature of the technology, if there is an outstanding request with an overseas jurisdiction (i.e. a mutual legal assistance request) outstanding, then the period can be extended for up to three years.
In recognition of the volatile nature of cryptoassets there are also provisions enabling the conversion of the frozen cryptoassets into cash and then continuing to freeze the cash.
What is a Crypto Wallet Forfeiture Order?
If, following the imposition of a CWFrO the relevant agency investigates and concludes that some or all of cryptoassets held in a crypto wallet administered by a UK-connected cryptoasset service provider are the proceeds of crime, or are intended for use in criminal conduct, then the relevant agency can apply for some or all of the cryptoassets to be forfeited.
The forfeiture process involves offering various parties a chance to object to the forfeiture. If no objection is received within 30 days, then the cryptoassets in the cryptowallet are forfeited.
If a respondent does raise an objection, then the relevant authority must make an application to the Court for a Crypto Wallet Forfeiture Order (“CWFO”) to forfeit the cryptoassets in the crypto wallet.
Funds are the proceeds of crime
At this stage, for a CWFO to be granted, the relevant agency must persuade the Court on the balance of probabilities that the cryptoassets in the crypto wallet are the proceeds of crime (either within or outside the UK) or are intended for use in criminal conduct. This is a higher standard of proof for law enforcement to satisfy vis-a-vis the standard of proof required for the original CWFrO. There is no requirement for any criminal investigation or criminal conviction against the respondent.
Who may be affected by a Crypto Wallet Freezing Order or a Crypto Wallet Forfeiture Order
There are several parties who may be affected by a CWFrO or a CWFO. These include UK-connected cryptoasset service providers and various individuals who claim ownership of the cryptoassets frozen in the wallet.
How to respond to a Crypto Wallet Freezing Order or a Crypto Wallet Forfeiture Order
A CWFrO may be issued 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 representations 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 needs to satisfy at the CWFO stage, it may be better for the account holder in some cases to contest the matter at this point.
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. As such, 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.
The new powers permit victims and innocent parties to potentially recover cryptoassets which have been frozen.
There are circumstances where you can make an application for your cryptoassets to be released. Again, expert legal advice is always recommended.
Gherson’s white-collar crime team brings knowledge from both sides of the fence through experience in leading investigations into financial crime and also representing individuals subject to such investigations. As such, they are able to offer a bespoke and insightful strategy to give the best chance to head off any investigation at an early stage.
If you or your business have been affected by a Crypto Wallet Freezing Order or a Forfeiture Order, get in touch with our expert team today to discuss your options.
Increased reports of crypto fraud and scams – More from Gherson
The team have previously written a blog entitled what to do if you think that you have been victim of a crypto fraud or scam. This followed an earlier blog entitled what can you do to try and help avoid a crypto fraud of scam and a blog entitled what to do if your NFT has been stolen.
Reports of crypto fraud and scams remain on the increase. A recent article by Cyber states that around £1 million-worth of cryptocurrency scams are being reported by Santander UK customers each month. This article quoted Thomas Cattee, Solicitor in Gherson’s criminal litigation, investigations and regulatory department
How Gherson can assist
Criminal investigations and litigation
Gherson’s White Collar Crime and Regulatory team combines expert knowledge of criminal and regulatory law with a firm understanding of digital assets and blockchain technology. We provide strategic advice to clients seeking to investigate and pursue potential theft of cryptoassets. We also advise those facing investigations related to allegations of criminality involving cryptoassets.
Regulation and compliance
In these constantly changing times, firms dealing with cryptoassets—or those exposed to such firms—must carefully consider their systems and controls to ensure compliance with all relevant AML (Anti-Money Laundering) and sanctions regulations. Gherson’s White Collar Crime and Regulatory team offers advice and assistance with AML and sanctions compliance, including situations involving cryptoassets.
Contact us
If you would like to discuss any issues raised in this article or need advice regarding your specific circumstances, please do not hesitate to contact us. You can also reach out via e-mail or follow us on X, Facebook or LinkedIn to stay updated.
Updated: 31 March 2025
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
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