Yesterday, the Crown Prosecution Service (CPS) made submissions to the Home Affairs Committee regarding the need to have new laws to give better powers to the CPS to seize bitcoins from offenders.
The Evening Standard picked up on the submissions and wrote that the CPS thought bitcoins were “clearly property that can be restrained” but there were certain limitations in practice.
Restraining Orders usually are directed to alleged offenders or to those who have financially benefited from a crime. A Restraining Order is normally quite effective as assets of a domestic bank account can be easily be seized (mainly because the bank effectively controls the assets of a target).
The challenge with bitcoin is that if an Offender is subject to a Restraining Order then he/she can easily circumvent it, in practice, by just passing the private cryptographic key to someone else to download onto a new wallet and move the funds. The CPS therefore wants to enhance its powers to ensure that it has clear Restraint Order powers for virtual currencies.
Most likely, these new powers may involve delivery by the Offender of the private key controlling the bitcoins and powers for the police to reconstitute the bitcoin wallet and move the bitcoins to another wallet. However, no details have yet been provided on this matter yet.