The Australian Parliament will debate whether to enact a bill giving criminal authorities broad powers to seize digital assets. The Crimes and Other Legislation Amendment (Omnibus No. 1) Bill 2024 (the Bill) moved to a second reading yesterday and Parliament is currently considering amendments before a final vote.
The Bill proposes amending the Crimes Act 1914 (Crimes Act) and the Proceeds of Crime Act 2002 (Proceeds of Crime Act) by introducing a framework for the seizure of digital assets, reflecting a significant, and powerful shift in law enforcement’s focus on digital assets.
The Bill proposes a broad definition of “digital assets” to encompass digital representations of value or rights, including those held and transferred electronically via distributed ledger technology or similar structures.
The proposed amendments would enable law enforcement to seize digital assets under warrant in specific conditions. This includes the provision that digital assets can be seized if they are suspected to be evidential material related to indictable offences and that the seizure of the digital assets is necessary to prevent the digital asset’s concealment, loss or distribution, or use in committing an offence.
Interestingly, the Bill permits the use by the authorities of a computer or a data storage device found in the course of a search, a telecommunications facility operated by the Commonwealth or a carrier, or any other electronic equipment in order to seize a digital asset under a search warrant or for the purposes of obtaining access to data that is held in a computer or device in order to determine whether that data suggests the existence of a digital asset that may be seized.
Authorities also have the power to add, copy, delete or alter other data in a computer or device if necessary to obtain that data which relates to digital assets the subject of a warrant.
The enforcement powers proposed by the Bill, while designed to protect digital assets from being used for illicit purposes, will enable authorities broad power to control, manipulate, destroy and add any data as they see fit so long as it relates to the existence of digital assets which are the subject of a search warrant. In effect, the Bill would give criminal authorities broad power to interfere with digital property rights where they suspect criminal activity has or may occur.
The Bill also includes amendments to the Proceeds of Crime Act which would extend law enforcement authorities’ information gathering powers and freezing orders that currently apply to financial institutions to digital currency exchanges.
Proposed amendments to the bill will circulated before a final vote by Parliament. The proposed changes follow on the heels of legislation adopted in the UK which giving UK criminal authorities enhanced powers to seize and “destroy” crypto-assets linked to alleged criminal activities without a criminal conviction. A former Australian Federal Police officer appeared in Court in February to fight allegations that he stole more than $6 million in cryptocurrency following a raid in Hoppers Crossing in 2019.