Crypto wallet frozen by the police: freezing orders, conversion and forfeiture

The statutory scheme

• Seizure and detention of cryptoassets and cryptoasset-related items, such as devices or written seed phrases (POCA, Part 5, Chapter 3C).
• Crypto wallet freezing orders (Chapter 3D, sections 303Z36 to 303Z40). The court can vary or set aside an order on the application of anyone affected by it (section 303Z38), and can make exclusions, including for reasonable living expenses and, in England and Wales, legal expenses (section 303Z39).
• Forfeiture (Chapter 3E): the agency applies to the magistrates' court for a forfeiture order (section 303Z41). An appeal against forfeiture must be brought within 30 days (section 303Z47).
• Conversion (Chapter 3F): the court can order frozen or detained cryptoassets to be converted into money. No appeal can be made against a conversion order (sections 303Z54 and 303Z55), so representations about timing and value matter.
• Victims and owners can apply for release of cryptoassets they say belong to them (sections 303Z50 and 303Z51).

The rules were added by the Economic Crime and Corporate Transparency Act 2023 and came into force in England and Wales on 26 April 2024. They operate alongside account freezing orders for money held in banks. See account freezing orders.

Building a provenance file

• Exchange account statements and full transaction exports, with transaction hashes.
• Evidence of the fiat money that bought the crypto: bank statements, payslips, sale proceeds.
• For mining, staking or trading income, records of the activity and tax returns.
• For crypto received from others, invoices, messages and the identity checks you carried out.
• Blockchain analytics, where the agency relies on tracing, to test whether the link is real or only a hop through a busy exchange address.

Testing the agency's case

Ask what unlawful conduct is alleged and how each asset is said to connect to it. Tracing through mixers, bridges and exchange omnibus wallets often involves assumptions. Check whether the analytics treat every coin in a wallet as tainted, and whether your own clean funds have been mixed into the calculation. Identify any lawful source the agency has not considered.

Typical sequence

1. The exchange restricts the account, sometimes before any court order.
2. An officer applies to the magistrates' court for a freezing order, often without notice.
3. You receive notice of the order and its expiry date.
4. The agency investigates and may apply to convert the assets to money.
5. The agency applies to the magistrates' court for forfeiture.
6. A contested hearing decides whether the assets, or some of them, are forfeited. An appeal against forfeiture must be brought within 30 days.

Deadlines can be short. Diarise every date on the order and any notice.

• Do not try to move, swap or bridge assets out of a frozen wallet, or ask anyone else to.
• Do not contact the agency to explain yourself without advice; what you say can be used in forfeiture or criminal proceedings.
• Secure your records and devices; do not delete apps or messages.
• Note the date you received any order or notice, and diarise every hearing date and deadline.

Send the order or notice, the court and next date, the platform and wallet details, and a short explanation of where the assets came from.