Unexplained Wealth Orders and Cryptoassets Explained
Unexplained Wealth Order and Cryptoassets Explained
So you are a cryptocurrency entrepreneur and have assets from cryptocurrency, including NFTs or other peer-to-peer currency, over £50,000.00?
It is highly likely that you find yourself on the radar of law enforcement if your stated income is not commensurate to your assets. Getting on the enforcement authority radar means probably receiving an Unexplained Wealth Order (UWO). UWOs have been around for a while, but the invasion of Ukraine has generated a lot of momentum concerning UWOs. The courts are seeing a massive increase in applications for UWOs and an increase in cryptocurrency entrepreneur respondents.
The Passage of the Economic Crime (Transparency and Enforcement) Act 2022
In response to the current situation in Ukraine, on 15th March 2022, the UK Government fast-tracked the passage of the Economic Crime (Transparency and Enforcement) Act 2022 (the “2022 Act”). The aim is to dissuade PEPs from redirecting their property to the UK unlawfully. Some of the changes introduced by the 2022 Act include:
1. Amendments to the Unexplained Wealth Order (UWO) regime (Part 2, sections 45 to 53 of the Act). These amendments include-
a) The requirement that the Secretary of State shall publish an annual report in which they detail the number of UWOs applied for and granted.
b) Creation of a new category of person who can receive a UWO. This will now include “responsible officers” of the entity that owns the property.
c) Creation of a new alternative test for granting an UWO.
d) Allowing the National Crime Agency to simultaneously apply for an UWO and interim freezing order prohibiting the respondent from selling it.
e) Limiting the liability of enforcement authorities to pay costs in legal proceedings relating to UWOs (or interim freezing orders).
2. Amendments to Creating a Register of Overseas Entities (Part 1, sections 1 to 44 of the Act). This amendment establishes a Register of Overseas Entities (Register), increasing transparency on ownership and control of overseas entities of UK property. Any beneficial owner with 25% ownership stake in a company must be registered.
The Passage of the Economic Crime (Transparency and Enforcement) Act 2022
In response to the current situation in Ukraine, on 15th March 2022, the UK Government fast-tracked the passage of the Economic Crime (Transparency and Enforcement) Act 2022 (the “2022 Act”). The aim is to dissuade PEPs from redirecting their property to the UK unlawfully. Some of the changes introduced by the 2022 Act include:
1. Amendments to the Unexplained Wealth Order (UWO) regime (Part 2, sections 45 to 53 of the Act). These amendments include-
a) The requirement that the Secretary of State shall publish an annual report in which they detail the number of UWOs applied for and granted.
b) Creation of a new category of person who can receive a UWO. This will now include “responsible officers” of the entity that owns the property.
c) Creation of a new alternative test for granting a UWO.
d) Allowing the NCA to simultaneously apply for a UWO and interim freezing order prohibiting the respondent from selling it.
e) Limiting the liability of enforcement authorities to pay costs in legal proceedings relating to UWOs (or interim freezing orders).
2. Amendments to Creating a Register of Overseas Entities (Part 1, sections 1 to 44 of the Act). This amendment establishes a Register of Overseas Entities (Register), increasing transparency on ownership and control of overseas entities of UK property. Any beneficial owner with a 25% ownership stake in a company must be registered.
Mr Peter Adediran specialises in representing cryptocurrency entrepreneurs and private client wealth. To obtain an accurate opinion about your matter or to book an appointment, please call (020) 7305-7491 or at peter@pailsolicitors.co.uk.
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