Evan Wright represented a client who received an account freezing order relating to £16,000,000.00 of crypto-currency. Following a complex legal and factual submission about the original source of the funds and the transactions between wallets, the National Crime Agency agreed the release the full amount. They did not make an application for forfeiture.

The National Crime Agency obtained the account freezing order from the Magistrates Court in accordance with 303Z3(2) of the Proceeds of Crime Act 2002. They argued that the funds represented the proceeds of crime and/or were intended for a criminal purpose. The order was to last for six months, so the officers could investigate the provenance of the funds.

Early communication with the NCA was important in establishing their concerns. Communications led to a list of topics to be covered during a recorded interview at a local police station. Evidence was gathered and we attended interview with an explanation supported by various documents. Once the key issues were discussed, we helped develop a lengthy written submission. It contained numerous hyperlinks to resources and exhibits the officers could consider as part of understanding the technical aspects of what the client had done with the original investment. It was essentially an audit trail of wallet transactions, accompanied by an explanation for each set. The profits across many thousands of transactions were significant and the written response described the client’s investment methodology. The client’s technical expertise was very important as we translated technical information into a language and approach the court could understand in the event of an application for forfeiture. Indeed, the client’s expertise helped avoid the need for a forensic expert’s report dealing with transaction integrity.

The response included evidence of where the original investment funds had come from and how tax was to be paid on the profits off-ramped to fiat currency. It was important to produce a response that could be used in an application to the court for the release of the funds. This let the NCA know that our submission complied with the relevant procedure rules. In the event, the NCA took advice from their technical experts regarding the integrity of the wallet transactions and agreed our position on the lawfulness of the original funds. It was established that the frozen assets were not ‘recoverable property’ in that they did not represent the proceeds of crime and were not intended for a criminal purpose. The NCA voluntarily applied to the court for discharge of the account freezing order and directed the bank to release the funds to our client. The process took almost exactly 3 months from the date of the order to release of the cash.