Edmonds Marshall McMahon has obtained the UK’s second only order under section 3035Z51 of the Proceeds of Crime Act 2002 (“POCA”) for the release of crypto assets subject to a Crypto Wallet Freezing Order.
The applicant fell victim to a sophisticated scam which led to the theft of 10 million Tether. The Tether was swapped and transferred into various exchanges held worldwide. One such exchange was Kraken, a UK registered exchange. After various wallets holding the stolen funds were flagged by a crypto tracing firm, enforcement authorities were notified. The Metropolitan Police thereafter obtained a Crypto Wallet Freezing Order pursuant to section 3035Z37(2) of POCA, against a Kraken wallet holding 87 Ether solely derived from the stolen crypto.
Where stolen cryptoassets are held in a crypto wallet administered by a “UK-connected crypto asset provider”, new POCA provisions permit law enforcement to apply for Crypto Wallet Freezing Orders, and thereafter, an application can be made to release the frozen crypto assets back to the victim. In this instance, the victim was referred to Edmonds Marshall McMahon to make an application on its behalf.
In September 2025, a lay bench sitting at City of London Magistrates’ Court agreed that an order to repatriate the crypto held in the frozen account back to the victim was appropriate.
What is a crypto asset?
A “cryptoasset” is defined under section 303Z20 of POCA as “a cryptographically secured digital representation of value or contractual rights that uses a form of distributed ledger technology and can be transferred, stored or traded electronically”. Some of the more commonly known cryptocurrencies include Bitcoin, Ethereum and Tether.
Crypto Wallet Freezing Orders
A crypto wallet is defined under section 303Z20:
“crypto wallet” means—
(i) software,
(ii) hardware,
(iii) a physical item, or
(iv) any combination of the things mentioned in sub-paragraphs (i) to (iii), which is used to store the cryptographic private key that allows crypto assets to be accessed.
A crypto wallet can be frozen when the court is satisfied that there are reasonable grounds for suspecting that some or all of the cryptoassets held in the crypto wallet are (a) recoverable property or (b) intended by any person for use in unlawful conduct.
POCA and Victims
Under section 3035Z1, a victim who claims that any cryptoassets held in a crypto wallet in respect of which a Crypto Wallet Freezing Order has effect belongs to them, may apply for some or all of the cryptoassets to be released back to them. The victim must show:
- that they were deprived of the cryptoassets to which the application relates, or of property which they represent, by unlawful conduct,
- that the cryptoassets that they were deprived of were not recoverable property, and
- the cryptoassets belong to them.
What to do if my crypto is stolen?
Recovering stolen crypto assets requires prompt action to identify and freeze wallets.
In a world where reports to Action Fraud yield little to no response, victims are forced to take their own measures and engage the private sector. Whilst this can be costly, where the value of the crypto assets is particularly large, doing so may be fruitful. The first step is of course to trace the assets and notify exchanges of wallets which hold stolen crypto. In this case, the report on the wallet fed back to the Metropolitan Police who contacted the victim on their own volition. It is hoped that with the rise of crypto fraud, such action from Enforcement Authorities will become more prevalent.
This case was led by Partner, Tamlyn Edmonds, and Senior Associate, Mai Holdom, with Sarah Wood of 5 Saint Andrews Hill instructed as counsel.
