The growing use of cryptocurrency and digital assets in the commission of organised crime has given rise to the need for a responsive change in policing and law enforcement legislation.
The Major Crime and Community Safety Legislation Amendment Bill 2022 (Bill) was introduced in the lower house of the Victorian Parliament earlier this month.
The Bill contains a spate of changes to Victorian laws dealing with proceeds of crime, search and seizure, crime scene powers and evidence gathering.
Some of these reforms are specifically targeted towards the gathering of evidence relating to, and seizure of, digital assets, such as cryptocurrency, used in the commission of offences.
What are the changes being introduced?
The Bill will amend and insert new provisions into the Confiscation Act 1997 (Vic) (Confiscation Act) to strengthen police powers.
In particular, the provisions of the Confiscation Act relating to the making of freezing orders will be amended so as to ensure that digital assets (defined as digital representation of value or contractual rights, that may be transferred, stored or traded electronically. Examples of which include digital currencies, coins or tokens) are captured by those orders. The Bill importantly amends the definition of a “financial institution” to now include “digital currency exchanges” and makes provision for the addition of other institutions by way of regulation in the future.
The effect of these amendments is that the Magistrates’ Court will be able to make orders which prevent transactions being made in relation to digital asset accounts or wallets held with financial institutions. The purpose of these orders will be to ensure that such digital assets cannot be dissipated by a person from a specified account.
Police will also have powers to issue information notices relating to digital asset accounts to financial institutions, which would essentially require the provision of information about the type and quantum or value of the digital asset in those accounts from the financial institution which the notice is directed to.
The Bill also introduces new police powers to ensure that search warrants will be as effective against digital assets as they are against physical assets. For example:
- Police will have the power to seize digital assets, or the means of accessing them while executing a search warrant;
- Police will be able to direct persons, such as a person reasonably suspected of committing the relevant offence or the owner or lessee of the relevant computer, data storage device or thing (such as any item upon which data like code or text has been recorded) or a person who uses or has used the computer, data storage device or thing, to provide them with information or assistance in order to allow a police officer to access a computer, data storage device, or thing, while executing a search warrant; and
- Corresponding changes to the Crimes Act 1958 (Vic) will give a police officer the power under a search warrant to personally take copies of electronic data from computers and storage devices, or seek assistance from people with specialised skills or technical knowledge to execute a search warrant, without those assistants being named in advance in the warrant, where those expert’s skills are necessary to execute the search warrant.
These important changes will ensure that search warrants and freezing orders will be effective against digital assets, including cryptocurrency, allowing law enforcement to be responsive and efficient in dealing with the evolution of the commission of crime in an ever increasing digital world.