For those who have spent any length of time in London, it is concerningly apparent how rife the capital is for phone snatching. One would be forgiven for thinking this is driven by chancing thieves, but the reality is that this has become a focal point for organised, criminal groups.
The Crime Survey has indicated that in the region of 80,000 mobile phones were stolen in the year ending 2024 (an almost 25% increase from the approximately 64,000 stolen in the year ending 2023). It makes for unsurprising reading to see that the vast majority of these incidents took place in London, with the Metropolitan Police dealing with 64,000 of these incidents in 2024.
Stolen phones collectively represent a street value in the region of £20m. However, the face value of these stolen mobile phones is just a surface-level indication of the financial harm these instances cause.
It has now become (rather tragically) commonplace for thieves to unlock devices and rapidly drain assets from mobile banking applications and, more increasingly, cryptocurrency wallets. The latter of these is known as “crypto-muggings”. Another common tactic is for the thieves to convert fiat currencies (i.e. sterling) into cryptocurrencies to aid their efforts in laundering these funds at pace.
This begs the question, what can be done; and more pertinently, what is being done, to combat this growing trend of phone theft and crypto-mugging?
Naturally, the first port of call for victims is to report the theft to the police. Both the Met and the City of London Police are live to this issue. Both sets of forces are deploying DNA spray, e-bike patrols, and reviewing CCTV. The City of London Police have also started spray painting fake “blue-plaque” warnings to indicate areas where there have been instances of phone snatching.
In recent years, various law enforcement agencies have commenced operations Calibre, Opal, and Swipe, with the aim of clamping down on these instances and deterring repeat offences.
Victims who have had their cryptocurrency assets stolen also have a suite of civil remedies at their disposal. The courts of England and Wales have proven themselves to be dynamic in their ability to assist victims in recovering their stolen assets.
It is now well established that victims in these circumstances can seek injunctive relief (disclosure orders, freezing orders, and the like), as well as bring claims on a host of grounds such as unjust enrichment, deceit, fraudulent misrepresentation and/or breach of express, or implied contractual duties.
However, many will say that, notwithstanding these available options, these are simply not adequate to combat this problem. The stark reality of the situation is that the Met and City of London Police are overly inundated with reports of these thefts and simply do not have the manpower to address each report with the attention it requires.
Additionally, whilst civil remedies can be effective, the process can (at times) struggle to keep pace with how these thieves move victims’ funds across blockchains. One would be mistaken in thinking that these are chancing, unsophisticated criminals. Rather, these are organised groups with cogent strategies for dissipating victims’ cryptocurrency with the intention of rapidly putting these funds beyond the reach of victims.
With all that said, is there a glimmer of hope to be had when taking a look at the onward regulatory landscape for cryptocurrencies?
At present, the regulatory remit for cryptocurrencies in the context of fraud is limited to the Money Laundering, Terrorist Financing and Funds (Information on the Payer) Regulations 2017. As part of the FCA’s roadmap, we have seen several discussion and consultation papers issued by the FCA in an attempt to set out how cryptocurrencies will be regulated going forward.
Most recently, the FCA published its discussion paper DP25/1, which gives details on (inter alia) its proposals to introduce requirements on crypto-asset trading platforms to undertake appropriate record keeping, as well as introduce transparency and reporting requirements for these platforms.
From a legislative perspective, progress has been, frankly, quite woeful. The only bespoke cryptocurrency legislation proposed to date is the Property (Digital assets, etc.) Bill, which only serves to confirm (if enacted) that digital or electronic ‘things’ are capable of being either a thing in possession or a thing in action. This is something which, for the most part, is undisputed both in common law as well as in academia.
Law enforcement has seen increased powers by virtue of the Economic Crime and Corporate Transparency Act 2023 (“ECCTA”). Specifically, Part 4 of ECCTA amends (inter alia) Part 3 of the Proceeds of Crime Act 2002 (“POCA”), and grants law enforcement a breadth of new powers to freeze, seize, and otherwise recover illicit crypto-assets.
Stemming from that, victims now also have increased remedies at their disposal to make an application on the back of law enforcement efforts, for the ultimate return of their assets.
Whilst it is all too easy to level criticism at the current state of affairs for victims of crypto fraud, it is vital that thought is, and continues to be, put towards what can be done to address this problem. This is no easy feat.
Following the enactment of the fresh powers for law enforcement agencies under POCA, there has been an increase in public-private cooperation, and to great effect. Public and private bodies have respective advantages over one another, and it seems blindingly clear that effective cooperation will only result in a net positive position for victims. This cooperation does not have to be constrained to these ‘new’ POCA powers, but perhaps this could be the catalyst to open the eyes of those in a position to further this.
By extension, increasing law enforcement’s capabilities and manpower to deal with these offences seems to be low-hanging fruit. Whilst this is an arguably obvious first port of call, it is wholeheartedly more easily said than done.
Much commentary has been seen on whether an increased onus should be placed on cryptocurrency trading platforms. Experts dealing with these frauds on a day-to-day basis will be all too aware that the crux of many cases hinges on the cooperation of cryptocurrency trading platforms – whether this be in preventing the transactions in the first instance, or ensuring they play ball in the context of wider litigation.
Plainly, these platforms are better placed to address these issues at the source as compared to the victims. The obvious issues that stem from this are twofold: (i) the counter-factual argument is that this will deter or stifle the growth of such platforms within the UK, and (ii) there are a plethora of exchanges that provide services to UK individuals, but that are operated outside of the jurisdiction. Quite what the best balancing act between these considerations looks like remains to be seen.
Perhaps a more robust possibility is to have a streamlined process for civil remedies. Indeed, this is something which the Law Commission has, in part, addressed in its very recently issued Consultation Paper. One particular proposal in this paper is for a free-standing information order, which would provide the court powers to issue such free-standing orders for digital and decentralised-centric disputes. The intention here is to streamline the initial investigatory phase of litigation, as well as ease the tension of territorial arguments in international private law.
In summary, the convergence of mobile device theft and cryptocurrency fraud has brought ‘crypto mugging’ – this substrate of fraud – into the limelight. It can happen to anyone, at any time – gone are the days of only needing to be cautious of spam emails and unsolicited phone calls, now everyone must walk down the street, constantly alert, aware and looking over their shoulder.
This has, in turn, created a sophisticated criminal financial ecosystem, with London being the epicenter. Whilst existing criminal law provides strong deterrence, and civil remedies offer a route to compensation, a coherent effort to regulate and combat this issue is required on all fronts.
If you’re looking to recover stolen crypto, call Edmonds Marshall McMahon for a free consultation with a specialist, cryptocurrency solicitor, on +44 (0)20 7583 8392. Our cases often extend beyond the borders of the UK, and we have a successful track record of crypto recovery across international jurisdictions.
