A Rapid response: A Critical mindset for Legal Practitioners in Digital Asset Recovery

Here in the UK, crypto regulation continues to grow legs after a relatively slow regulatory adoption. The FCA’s Crypto Roadmap, built from a series of consultations and discussion papers, sets out an ambitious timeline that aims to have a completed regulatory framework sometime in 2026. The lack of coherent classifications across high-court and common law (see: Law Commission, Digital Assets: Final Report, 2023), along with the difficulty of associating ownership to what is effectively a new asset class (see: AA v Persons Unknown), has made crypto fraud litigation an upwards battle.  
 
The Proceeds of Crime Act 2002 (POCA) continues to be the primary legislation in relation to the freezing and recovery of stolen funds in the UK. Since inception, numerous amendments have been made to POCA, including the classification of crypto as ‘property’, thereby allowing for full application of restraint and confiscation orders despite the inherent difficulties of tracing and identifying digital assets themselves. The Economic Crime and Corporate Transparency Act 2023 further enhanced POCA powers, allowing magistrates courts to provide investigators with the tools necessary to obtain information from crypto service providers and exchanges enabling them to freeze and detain crypto assets (representing criminal proceeds).  
 
Furthermore, law enforcement agencies now have non-conviction-based civil forfeiture powers specifically tailored for cryptoassets. This means authorities can seize and forfeit digital assets without needing to arrest or convict someone, as long as they have reasonable grounds to suspect the assets are linked to unlawful conduct.  
 
Whilst these changes mark significant strides legally, there remain significant challenges with the civil recovery process in the UK:  
 
• A shortage of law enforcement officers specialised in blockchain analysis, and cuts to law enforcement agencies budgets have a detrimental impact on successful case building;  
• More often than not, asset-tracing investigations are slow to commence, allowing for laundering tool like mixers and DEXs to come into play;  
• POCA powers strictly relate to UK based crypto fraud. Given the popularity of offshore service providers, it can be hard to establish seized assets as predominantly ‘UK-based’.  
 
How a proactive stance to security can circumvent a loose framework: A case for automated protection  
 
Here at iSanctuary we continue to offer an arsenal of on-chain data tools aimed at securing favourable conclusions for our clients, many of which have already been the victim of a fraud and require an immediate response at rates simply not attainable through the traditional civil recovery systems.
 
One such tool we continue to deploy for clients is a real-time alert system which monitors designated wallets, allowing swift action to be taken when activity has been identified. This capability empowers investigators, legal teams, and clients to act swiftly before the initial fraud has taken place or to prevent further movement from high-risk or suspicious wallets. By delivering instant alerts via email, SMS, or phone call, stakeholders can immediately initiate protective actions—such as notifying exchanges, requesting account freezes, or triggering legal procedures.  
 
Recently, our system played a pivotal role in an insolvency case involving significant company assets traced to a Ripple (XRP) wallet. An alert was configured so that any activity on the wallet would automatically trigger email notifications to all solicitors involved, alongside a direct phone call to iSanctuary’s cryptocurrency lead. We also prepared a formal notice in advance, ready to alert the relevant exchange the moment a transaction occurred. This preparedness enabled us to act within minutes, increasing the likelihood of freezing the assets and initiating recovery proceedings in accordance with POCA seizure guidelines.  
 
Private intelligence companies like iSanctuary continue to create value in a scattered and lagging regulatory landscape. We provide cross-jurisdictional support, not only as forensic specialists but as intermediaries between global authorities and clients. Speed is the name of the game here, and by combining a matrix of data tools with experienced financial investigator capabilities, we aim to bridge the gap facilitated by loosely regulated crypto markets. By providing multi-layered thorough financial mapping data tied to real-world identities, forensic companies like iSanctuary continue to provide support in establishing unequivocal evidence for claims related to ownership of digital goods, and the persecution of fraudsters thereafter.

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