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Could Bitcoin help Rachel Reeves fill the black hole in UK finances? Chancellor ‘could profit from £5bn sale' of seized criminal crypto cash
could use bitcoin worth more than £5billion confiscated from criminal gangs to help fund Labour's spending plans, it has been suggested.
The Home Office and police forces are said to be working on a major seven-figure sale of crypto-currency seized from organised crime figures, with the Treasury hoping to benefit.
There are also plans to develop a storage system that would allow the regular sale of confiscated crypto-currencies.
It comes as the Chancellor is facing pressure not to raise taxes in her autumn budget, after Labour backbenchers nixed efforts to cut the cost of the welfare bill and watered down plans to means-test the winter fuel payment.
The price of bitcoin hit an all-time high last week of £123,000 (92,0000), with the Telegraph reporting this would value a single stash of 61,000 taken from a Chinese Ponzi scheme by officials in 2018 at more than £5.4billion - far above its value at the time.
Aidan Larkin, the chief executive of Asset Reality, said: 'There is oil under our feet in terms of digital assets, from an illicit perspective, that could have hundreds of millions of pounds coming back into the UK each year.'
Ministers are increasingly seeing crypto-currency as a possible income stream.
Earlier this month ministers revealed they plan to crack down on speculators who evade tax on their profits.
Under new rules, holders of currencies such as Bitcoin, Ethereum or Dogecoin will face fines of £300 if they fail to provide personal details to crypto service providers they use to make sure they are paying the right amounts to HMRC.
The Government expects the new rules, which are known as the Cryptoasset Reporting Framework and take effect from January, to raise up to £315 million by April 2030.
Any service provider which fails to provide accurate details about transactions and tax reference numbers will also face fines.
Reform UK has recently pledged to cut taxes on cryptocurrencies and set up a 'Bitcoin reserve' if elected.
Party chairman Zia Yusuf told reporters in may that a Reform government would reduce capital gains tax on assets such as Bitcoin to 10 per cent as part of a raft of reforms to how cryptocurrencies are governed.
Mr Yusuf, who does not own cryptocurrency, suggested the cut could generate up to £1 billion for the Treasury over a decade, saying it would encourage more use of such currency and encourage people to move their assets to the UK.
Cryptocurrencies currently incur capital gains tax of either 18 per cent or 24 per cent, depending on the rate of income tax paid by the person selling the assets.
Mr Yusuf also announced that Reform would allow people to pay tax in Bitcoin and establish a 'Bitcoin reserve fund' to 'diversify' the UK's reserve holdings.
