The UK’s Insolvency Service has hired the world’s first public sector investigator to recover digital assets in criminal cases, personal bankruptcies and corporate insolvencies.
Andrew Small is a former police investigator with experience in financial crime and money laundering. He will deploy his knowledge of crypto assets and associated technologies to ensure the Insolvency Service traces and recovers digital assets in insolvency cases, so creditors receive as much of the outstanding debt as possible, according to a statement by the from the Insolvency Service.
4-Fold increase in cases
The main trigger for this appointment was a 420% increase in the number of insolvency cases involving crypto assets since 2019, with the estimated value of those assets now over £500,000. While the numbers are still relatively low, the increasing number of people owning digital assets means the volumes are set to increase.
“Crypto is growing in popularity, and we’ve seen the number of insolvency cases involving crypto asset ownership rise four-fold in the past five years.”
2024 research by the Financial Conduct Authority found seven million adults in the UK – 12% of the population – held some form of crypto, up from 3.2m adults, or 4.4% of the population, in 2021.
“There has been a rapid rise in crypto ownership in the UK, and alongside that, we’ve seen a similar rise in crypto asset ownership in bankruptcy cases," Small said in the statement. "My role will help the agency by providing specialist knowledge about the types of crypto assets available and the associated technology used to buy, sell and store them.”
Crypto as property
In 2019, the UK Jurisdiction Taskforce published a legal statement establishing that crypto assets are recognized as property under English law. Therefore, private sector Insolvency Practitioners are already required to realize the value of digital assets.
Small’s appointment is another small building block in the regulation of digital assets as a mainstream investment class and store of wealth.
