The rise of cryptocurrencies has brought both opportunities and challenges for individuals and the legal system worldwide. One of those challenges is crypto wallet freezing orders – a legal tool being used to combat crypto crime. Here’s everything you need to know about these orders, the implications and how to prepare.
Crypto wallet freezing orders are legal powers that allow law enforcement agencies (LEAs) to freeze and seize cryptocurrency assets if they suspect they are linked to criminal activity. These are an extension of the UK’s Proceeds of Crime Act 2002 (POCA) which already allows for assets like cash and bank accounts to be frozen and forfeited if suspected of being connected to criminal activity. Since April 2024 these powers have extended to crypto assets.
LEAs can search for, seize and freeze crypto wallets if there is “reasonable suspicion” that the assets are linked to criminal activity. Reasonable suspicion is a low threshold, similar to the level required for an arrest. Once seized the assets can be frozen for up to 3 years while investigations are conducted.
During this time the frozen assets can be forfeited if a court decides it is more likely than not that they are derived from or intended for criminal activity. Importantly these are civil proceedings so the standard of proof required is the balance of probabilities and not the criminal standard of beyond a reasonable doubt. Courts can use intelligence, open-source information and even hearsay evidence to make their decisions.
Previously, cases involving crypto asset seizure were heard in the High Court which provides a higher level of judicial scrutiny. Under the new provisions, these can now be brought before the Magistrates’ Court with appeals to the Crown Court. While this speeds up the process it raises concerns about the level of judicial oversight given the Magistrates’ Courts already have a heavy workload.
High net worth individuals with significant crypto holdings are most at risk under these new powers. LEAs will likely target individuals with substantial assets in the UK especially given the financial incentive for successful asset seizure. Therefore, it’s critical for individuals to maintain clear audit trails of their cryptocurrency transactions so they can respond quickly to any investigations.
The new provisions also allow victims of crime to apply for the return of seized assets. This provides an avenue for individuals or entities to litigate ownership of crypto assets in a potentially more cost effective way. However, this will increase the number of cases in the courts which will only add to the delays.
While the legislation gives LEAs significant powers there are still several challenges. Firstly, the UK’s Magistrates’ Courts are already suffering from a heavy workload. This will hinder the processing of crypto related applications. Secondly, there is a lack of specialist training and technological resources to trace and manage crypto assets. The shortage of qualified experts in the UK also means international assistance will often be required.
UK courts only have jurisdiction over assets and wallet providers in the UK. If you are concerned about these powers, you may consider transferring your assets to a wallet provider outside the UK. However, this raises additional legal and ethical considerations.
If you have crypto assets or do business with crypto assets, consider the following:
Crypto wallet freezing orders are a major development in the UK’s regulation of cryptocurrency and the fight against financial crime. While these powers give LEAs the tools they need, they also present challenges for high net worth individuals and businesses in the crypto space. Transparency, accurate records and expert advice will be key to navigating this new legal landscape.
For expert legal advice on crypto wallet freezing orders or other issues related to cryptocurrency, engage a solicitor with a track record of success in this area of law.
The cryptoasset solicitors at Lewis Nedas Law are experts in their field. We can advise on and guide you through all elements involved in the tracing and recovery of crypto assets and the removal of seizure and freezing orders. If you need advice or assistance on any aspect of crypto assets, please take expert legal advice from Lewis Nedas Law’s crypto asset solicitors.
Prenuptial agreements, or “prenups,” are becoming more common in the UK as couples look to protect their financial interests before marriage. Far from being a sign of distrust, a well-drafted prenuptial agreement is a practical tool that can give both parties clarity and peace of mind. This article examines the purpose, benefits, legal considerations and common myths surrounding prenuptial agreements.
A prenuptial agreement is a legally binding document between two people before marriage that outlines how assets will be divided in divorce or separation. Prenuptial agreements are constitutionally protected and enforceable under specific laws in many jurisdictions. It can cover property, savings, debts, inheritance and even future income, so it’s a tailored approach to asset division.
Prenups help protect pre-marital assets, family businesses or inheritances. You need to consider your financial situation when drafting a prenuptial agreement so it’s fair and enforceable. A prenuptial agreement clarifies financial responsibilities during the marriage and reduces conflicts if the relationship ends. For second marriages, a prenup can protect children’s inheritance rights.
Signing a prenuptial agreement can have many benefits for couples getting married. One of the main advantages is that it allows couples to have open and honest conversations about their financial expectations and goals. This can prevent potential conflicts and ensure both partners are on the same page. A prenuptial agreement can also give you security and stability as it outlines how assets will be divided in the event of a divorce. A prenuptial agreement can also protect specific assets like family businesses or inheritances and provide a framework for managing finances during the marriage. Anyone getting married should consider signing a prenuptial agreement. However, some people may benefit more from a prenuptial agreement than others. For example, people with significant assets such as property or investments may want to consider a prenuptial agreement to protect their wealth. Couples getting married for the second time or who have children from a previous relationship may also benefit from a prenuptial agreement. People expecting to receive a large inheritance or have a family business may want to consider a prenuptial agreement to protect their interests.
A prenuptial agreement should include a complete outline of how assets will be divided in the event of a divorce. This can consist of property, finances, investments and other assets. The agreement should also outline how debts will be handled and how financial responsibilities will be managed during the marriage. Couples may also want to include provisions for spousal support, childcare and long-term care. You should seek independent legal advice to ensure the agreement is fair and reasonable.
A prenuptial agreement protects specific assets one or both parties bring into the marriage. For example, if one partner owns a family business, a prenup can ensure the business stays within the family in the event of a divorce. Inheritances and significant personal investments can be protected through a prenuptial agreement. Couples can avoid potential conflicts and protect their individual financial interests by defining the ownership and division of these assets.
While prenuptial agreements are not automatically legally binding in the UK, courts are increasingly willing to uphold them if they meet specific criteria. For a prenuptial agreement to be legally enforceable, it must meet the following criteria:
Legal advice for each party is also recommended to ensure fairness.
“Prenups are only for the wealthy.”
This is a myth. Prenups can benefit couples of all backgrounds by giving clarity and reducing the cost and stress of divorce.
“Suggesting a prenup means you don’t trust each other.”
On the contrary, discussing a prenup can strengthen the relationship by having open conversations about finances.
If you are already married, a postnuptial agreement is an option. Trusts and other estate planning tools can also protect assets.
A prenup is a practical step for anyone getting married, with a clear plan for asset protection and less uncertainty. Consulting a specialist family solicitor means the agreement will be fair, balanced and more likely to be upheld by the courts. If you need advice on drafting a prenup, contact Giovanni Lombardo at Lewis Nedas Law.
In marriage, civil partnership and prenuptial agreements, capacity is a complex and vital issue. The legal ability to marry, enter into a civil partnership or make a prenuptial agreement depends on a person’s mental capacity, that is, these decisions are made voluntarily and with complete understanding. This article explains what capacity means, how it’s assessed and what it means for marriage, civil partnership and prenuptial agreements.
Capacity means a person’s ability to understand and make decisions about legal matters. Under the Mental Capacity Act 2005, a person is presumed to have capacity unless established otherwise. Capacity is decision-specific; a person may be capable of making some decisions but not others.
To have capacity, an individual must be able to:
1. Understand the information relevant to the decision.
2. Retain that information long enough to make a decision.
3. Use or weigh that information as part of the decision making process.
4. Communicate their decision by any means.
If any of these elements are lacking, the individual may be deemed to lack capacity for that particular decision.
Capacity assessments should be decision specific and time specific. For example, an individual may lack capacity at one time but regain it later. The assessment is usually carried out by healthcare professionals or legal experts who consider the complexity of the decision and the person’s ability to understand the consequences, especially if the individual lacks capacity due to cognitive impairment or decision-specific circumstances.
The Mental Capacity Act 2005 sets out a two-stage test for assessing capacity:
1. Impairment or Disturbance: Is there an impairment of, or disturbance in, the functioning of the person’s mind or brain?
2. Decision Making Ability: Does this impairment mean the person cannot make a specific decision when required?
If both are met, the person may lack capacity to make that decision.
The legal test for capacity to marry is relatively straightforward compared to other decisions. An individual must understand the nature of marriage and the duties and responsibilities that come with it. This includes the permanence of the union, mutual duties of support and the impact on legal rights for inheritance. Capacity to marry is not based on the characteristics of the future spouse. It is important to note that the threshold for capacity to marry is lower than for other legal decisions. A person doesn’t need to understand every legal or financial consequence of marriage, only the essential nature of the union. For example, understanding how marriage affects a will is not necessary, but understanding that marriage is a legally binding relationship is. The capacity to marry is not person-specific; instead, it is focused on the individual’s understanding of the nature of marriage.
Unlike marriage, the capacity required to enter a prenuptial agreement is higher. This is because prenuptial agreements involve complex financial and legal consequences that demand deeper understanding.
Financial transparency is key to a successful prenuptial agreement as it ensures both parties fully understand their assets and the implications of the agreement.
To have the capacity to enter into a prenuptial agreement, an individual must:
· Understand the nature of the agreement and its effects.
· Appreciate the financial implications, including what rights they may be surrendering.
· Be free from undue influence or coercion.
If there is any doubt about a person’s capacity to understand these implications, getting a formal capacity assessment before signing such an agreement is recommended.
Capacity can be challenged in both marriage and prenuptial agreements, often by family members or legal representatives. A marriage can be annulled if it is proved that one party lacked capacity to consent. A prenuptial agreement can be deemed invalid if one party did not have the required capacity when signing.
In such cases, the court will review medical evidence, witness statements and expert reports to determine whether capacity was lacking when the decision was made.
Capacity is key in marriage and prenuptial agreements to protect individuals from making decisions they don’t fully understand. The threshold for capacity to marry is relatively low, the capacity required for prenuptial agreements is much higher due to their complexity and financial implications.
If you need expert advice on capacity, marriage or prenuptial agreements, Lewis Nedas Law’s specialist solicitors are here to help. Contact Giovanni Lombardo today to protect your rights and interests
In this digital age, our online presence and digital assets have value – both financial and sentimental. When making a Will or Power of Attorney it’s just as important to manage your digital assets as your physical possessions. However managing digital assets is tricky as they are intangible, hard to access and subject to platform policies and international laws.
Digital assets are any electronic data that exist online or on digital devices. Some examples include:
As technology changes new types of digital assets will emerge so it’s important to review your estate planning regularly to make sure these assets are included.
Physical assets are protected by locks and keys whilst digital assets are protected by passwords, encryption and multi-factor authentication. Without prior planning your executors or attorneys will likely struggle to access your digital assets and lose valuable or sentimental content. Some digital assets, especially cryptoassets, have significant financial value so managing them is important for your estate.
When making your Will or Power of Attorney you need to specify who should manage and access your digital assets. This requires careful planning as some platforms restrict access to the original account holder, regardless of legal documentation. To make managing your digital estate easier consider:
Giving your nominee access to your digital assets can be tricky as security measures are designed to prevent unauthorised access. But you can make this process easier:
One of the biggest challenges with digital assets after death is jurisdictional differences. Many online platforms and cloud storage services are global so the laws that apply will depend on where the servers are located. But as long as your nominee has the necessary access credentials, they should be able to manage the assets in accordance with your wishes regardless of geographical boundaries.
Don’t forget to plan for your digital assets as well as your physical assets. If you want to make sure your online presence and digital assets are managed in accordance with your wishes you need to include them in your Will and Power of Attorney.
Our estate planning lawyers can help you with digital asset management. Here at Lewis Nedas Law, we pride ourselves on our high standards of thorough, professional will writing, estate planning and administration and Trust advice. We offer a personal sensitive service and can:
If you need advice or assistance with Wills or LPAs, please take expert legal advice from Lewis Nedas Law’s private client solicitors.
Siobhain Egan acted for:
The NHS reports that there are more than 944,000 people in the UK who have dementia. They also say that 1 in 11 people over the age of 65 has dementia in the UK. They also point out that dementia is increasing because people are living longer. By 2030, they estimate that over 1 million people in the UK will suffer from dementia.
The capacity to make a Will or a Lasting Power of Attorney (LPA) is key. As the figures show, as more of the elderly population have dementia, it is essential to make your Will and Lasting Power of Attorney at a younger age. However, that is not always possible.
With dementia is becoming more and more of an issue as we age, one of the big questions is “Can someone with dementia still make a Will or a Lasting Power of Attorney (LPA)?”. To answer this question, we need to consider the facts and circumstances at the time the individual with dementia has the Will and LPA drawn up.
Mental capacity is the key to making a Will or LPA. In legal terms, mental capacity means being able to weigh up options and make decisions for yourself. The Mental Capacity Act 2005 sets out the rules. It is worth noting that a diagnosis of dementia doesn’t mean you automatically lack capacity. Capacity can fluctuate, especially in the early stages of dementia so each case is individual.
To make a valid Will a person must have “testamentary capacity”. This means they must understand:
If there are concerns about the person’s mental capacity at the time of making the Will it is prudent to get a medical opinion to confirm they understand what they are doing. In some cases, this can prevent disputes later on if the Will is challenged after the person has died.
There are two types of LPAs: one for property and financial affairs and one for health and welfare decisions. An LPA allows someone to appoint trusted people to make decisions on their behalf if they lose capacity in the future.
To create an LPA the individual must have mental capacity at the time of signing. Like making a Will, dementia does not mean someone cannot understand the implications of appointing an attorney. But it is important to make sure the person understands:
It’s also important the LPA is certified by an independent person who can confirm the person understands what they are signing and is not under any pressure.
When capacity is in question taking extra precautions can safeguard the individual and their wishes. Solicitors often recommend getting a medical opinion when there is doubt about mental capacity. It is a good idea to have the medical expert certify the LPA. This can prevent legal challenges from family members or other interested parties later on.
If someone has lost capacity and hasn’t made a Will or LPA they may leave their family in a difficult situation. Without an LPA relatives will have to apply to the Court of Protection to become a deputy to manage the person’s affairs or to seek a Statutory Will. Most types of court processes are lengthy and expensive. Seeking appointment as a deputy or for a Standard Will can certainly fall into that category. All this can be avoided with early planning.
Dementia makes decision making more complicated but doesn’t mean someone cannot make a valid Will or LPA. Early planning is key as it gives individuals the best chance to express their wishes and appoint trusted people to act on their behalf. If you or someone you know has capacity concerns, seek expert legal advice.
Here at Lewis Nedas Law we pride ourselves on our high standards of thorough, professional will writing, estate planning and administration, and Trust advice. We offer a personal sensitive service and can:
If you would like further information on any of the issues covered in this blog, please do not hesitate to get in touch. Please contact us on 020 7387 2032 or fill in our online enquiry form to get help from our experienced team.
With the rapid rise of cryptocurrency, the regulatory landscape is evolving to keep up with the challenges posed by this new asset class. The Economic Crime and Corporate Transparency Act 2023 has given UK authorities the power to issue cryptoasset restraint and freezing orders. As they get to grip with these new tools, it’s clear they will be used more frequently in the fight against crypto-related financial crime.
The addition of Chapter 3C in the Proceeds of Crime Act 2002 has been a significant development. This new chapter allows the police and other authorities to focus on the crypto environment—wallets and exchanges—where assets are often held or traded. By targeting those, they can freeze assets in real-time, preventing their movement during investigations or legal proceedings.
For cryptoasset holders, having their cryptoassets frozen can become a lengthy and frustrating ordeal. Initially, assets are frozen for up to 48 hours and, with extensions, up to six months or more. During this time, you cannot access or trade your holdings, often missing out on financial opportunities. Extensions are only granted if the authorities justify when the freeze should continue. Cryptoasset owners can challenge these decisions in court. However, these cases are complex and specialist legal advice is crucial.
Fraudsters exploit the unregulated crypto space. They use fake exchanges and phishing scams to steal cryptoassets. With the speed and anonymity of crypto transactions, stolen assets can be moved across the world in seconds, making recovery hard. Asset freezing orders are one of the best tools to stop the damage. These orders stop the movement of stolen assets so authorities can get control and stop criminals benefiting from their crimes.
Authorities are using freezing orders more proactively, especially in cases where investigations are just starting. With advances in blockchain analysis and cross-border cooperation, the police and the authorities can trace and freeze assets earlier in the process. This trend toward pre-emptive action will mean a lot more freezing orders will be used, giving authorities new tool in their fight against crypto-related crime.
If your cryptoassets are frozen, you need to act fast. Delay can mean more financial damage, so get expert legal advice. A solicitor experienced in cryptoasset law can help challenge the order, get funds released for essential expenses, or even get the freeze lifted if criminal involvement cannot be proven.
Cryptoasset freezing orders will be used increasingly as authorities get better at tackling financial crime in the crypto space. With governments around the world plugging regulatory loopholes, these orders will be a key tool for freezing and recovering laundered money.
If you wish to challenge an asset freezing order, you should engage a solicitor with a track record of success in this area of law.
The cryptoasset solicitors at Lewis Nedas Law are experts in their field. We can advise and guide you through all aspects of seizure, retention and release of cryptoassets. If you need advice or assistance on any aspect of cryptoassets, please take expert legal advice from Lewis Nedas Law’s crypto asset solicitors.
Blog post by expert crypto asset defence solicitor Siobhain Egan. For expert, trusted legal advice, please telephone us on 020 7387 2032 or complete our online enquiry form.
HMRC is taking a more active role in recovering tax due from those involved in the crypto asset world. Taxpayers are being encouraged to use HMRC’s new online disclosure facility to declare any unpaid taxes. This voluntary scheme covers tax due from crypto asset dealing, including exchange tokens, NFT’s and utility tokens.
Whilst this initiative might seem new, HMRC issued guidance in 2018 about paying tax by those involved in crypto assets. Whilst crypto assets can be bought, sold and traded with a high level of anonymity, HMRC suspects it is due substantial tax from those engaged in those activities.
Before you make disclosure to HMRC, you need to establish if you have a tax liability.
There is the possibility that you may owe some or all of the following types of tax:
Crypto assets trading may have provided you with a taxable income. There may also be national insurance implications if you received crypto assets as part of your salary.
If you are a company involved in a crypto asset business or deal in crypto assets, income and gains should be included in your Corporation Tax Return.
If you are operating as a business with a trading turnover above the VAT threshold you need to account to HMRC for VAT.
If you have invested in crypto assets and have sold these for gain, you may be liable to Capital Gains Tax.
Next, you need to work out how many years you need to declare. This will depend on why you have not previously declared the tax due. There are three options at this stage.
You underreported the tax liability:
The extent of the liability, in terms of time, will depend on the reason for underreporting tax:
In addition, you will need to pay interest and penalties.
Finally, after you have submitted the unpaid tax calculations to HMRC, you must make full payment within thirty days of submitting the disclosure.
If you are engaged in creating, dealing or investing in crypto assets and have failed to account for income and profits to HMRC take expert legal advice from Lewis Nedas Law’s crypto asset defence solicitors before doing anything.
Blog post by expert crypto asset defence solicitor Siobhain Egan. For expert, trusted legal advice, please telephone us on 020 7387 2032 or complete our online enquiry form.
Freezing cryptoassets became easier for the authorities when the relevant sections of the Economic Crime and Corporate Transparency Act 2023 came into force on 31 January 2024. This act extends the capability of the Proceeds of Crime Act 2022 by introducing a new Chapter. This new chapter replicates powers enjoyed by the police and certain authorities to freeze physical assets such as cash and property.
An asset freezing order is an order obtained, in criminal cases, by the police and certified financial investigators from the courts. It authorises them to attach assets.
An asset freezing order can also be obtained in a civil case when just cause is shown to the court. The court will supervise the freezing order until its determination.
When an asset freezing order is obtained, it freezes the assets on either a crypto trading exchange or in a crypto wallet. It also allows physical assets such as a USB drive or memory stick to be seized.
This means the crypto exchange cannot allow any interaction with the cryptoassets without permission from the courts. Access to the crypto wallet is controlled by the courts. Physical items seized by the police or authorised financial investigator are also subject to the authority of the courts.
As the cryptoassets are held to the order of the court, the only route to seek their release is through the courts.
You will need to mount a challenge to unfreeze the cryptoassets and to regain control over them.
In criminal proceedings, the owner of the cryptoassets will need to persuade the court that they are uninvolved in any criminal activity or wrongdoing. Even if the court does not unfreeze the order, you may be able to persuade it to release some part of the cryptoassets for living or business expenses.
It is important to be aware that asset freezing orders are time limited. They will initially be in place for 48 hours. An application needs to be made to extend this to 6 months. Further applications need to be made and the maximum time that an asset freeze can apply is 3 years. In each instance, those looking to extend the order, must justify why keeping the order in place is necessary.
On each occasion that an application for an extension is made, those affected by the order can make representation to the court seeking their release.
If you wish to challenge an asset freezing order, you should engage a solicitor with a track record of success in this area of law.
The cryptoasset solicitors at Lewis Nedas Law are experts in their field. We can advise on and guide you through all aspects of seizure, retention and release of cryptoassets. If you need advice or assistance on any aspect of cryptoassets, please take expert legal advice from Lewis Nedas Law’s crypto asset solicitors
Blog post by expert crypto asset defence solicitor Siobhain Egan. For expert, trusted legal advice, please telephone us on 020 7387 2032 or complete our online enquiry form.
It is a well-known fact that cryptoassets are targeted by fraudsters. They consider the possibility of prosecution negligible and the need to return the stolen assets almost non-existent. Indeed, the speed with which the stolen cryptoassets can be moved and converted into cash is positively breathtaking!
Perhaps the most common method of theft is through a fake exchange. Usually, a fraudster will contact you to persuade you to invest in cryptoassets. Once you’ve invested, they’ll invite you to register the cryptoassets with a fake exchange. This means that once you transfer your cryptoassets to the fake exchange, the fraudster has control. You will only know about this when you try to log onto the fake exchange and discover that you are locked out.
There are, of course, other ways fraudsters can steal your cryptoassets so you need to always be vigilant.
The very nature of cryptoassets means they are easy to move quickly. Because they are intangible and transferred electronically, a simple instruction is sufficient to move them from one holder to another. Once someone gains control over the cryptoassets, they can move them to the other side of the world instantly.
Simply reporting the theft to the police is unlikely to lead to restoration of your ownership of the stolen cryptoassets in the near term. However, to seek recovery you need to raise civil proceedings. To do that, you will need a solicitor experienced in dealing with cryptoassets.
Cryptoassets are easily transferrable. That means the first thing you need to try to do is to prevent that transmission. The fraudster will likely have transferred the cryptoassets to what they consider to be a safe haven abroad.
The first relief you will need to seek is a worldwide freezing injunction. This will prevent the further transfer of the assets.
You will also seek their recovery or a cash equivalence and, potentially, damages. You may also require information from the banking system if the cryptoassets have been converted to cash and lodged in a bank account.
In tandem with instructing solicitors, you will also need to find out where your cryptoassets have gone.
Despite the common myth that cryptoassets are untraceable, an experienced analyst working in this field will be able to track the assets. This is because each transaction on the blockchain is recorded. Painstaking work will provide the location of the assets.
If you wish to recover stolen cryptoassets you should engage a solicitor with a track record of success in this area of law.
The cryptoasset solicitors at Lewis Nedas Law are experts in their field. We can advise on and guide you through all aspects of the recovery of stolen cryptoassets. If you need advice or assistance on any aspect of cryptoassets, please take expert legal advice from Lewis Nedas Law’s crypto asset solicitors.
Blog post by expert crypto asset defence solicitor Siobhain Egan. For expert, trusted legal advice, please telephone us on 020 7387 2032 or complete our online enquiry form.