The UK House of Lords has passed a bill allowing for the seizure and freezing of digital assets linked to criminal activity.
The initiative, called the Economic Crime and Corporate Transparency Bill, was introduced in September last year. A month later, lawmakers introduced a series of amendments aimed at facilitating the seizure of cryptocurrencies in cases of terrorist financing.
The document must pass through the House of Commons before finally coming into force.
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The bill gives law enforcement the power to block criminal transactions on an emergency basis and gives courts the ability to order the seizure of funds.
To identify illegal activity, the UK authorities have appointed digital asset assessors to advise police and other law enforcement agencies.
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The country's authorities believe the new laws would cement the UK's reputation as a place for legitimate businesses to thrive and eliminate illegal sources of revenue.
As part of the fight against financial crime, the rules require business registration and identity verification.