Addressing digital assets in criminal activities: the Crimes and Other Legislation Amendment (Omnibus No. 1) Act 2024 (Cth)

The rise of digital assets has created new challenges in combating criminal activity and the holding of illicit gains, including those linked to dark web crimes, ransomware, cyber offences, money laundering and terrorist financing. The Crimes and Other Legislation Amendment (Omnibus No. 1) Act 2024 (Cth) (the Act), assented on 24 October 2024, introduces critical updates to strengthen legal frameworks in this area. 

Regarding digital assets, the Act amends the Crimes Act 1914 (Cth) (Crimes Act), Proceeds of Crime Act 2002 (Cth) (Proceeds of Crime Act), and the National Anti-Corruption Commission Act 2022 (Cth) (NACC Act).

We outline the key changes you need to know about. 

Crimes Act

• A definition of digital asset has been inserted under subsection 3C(1) of the Crimes Act:
  1. a digital representation of value or rights (including rights to property), the ownership of which is evidenced cryptographically and that is held and transferred electronically by:
     1. a type of distributed ledger technology; or
     2. another distributed cryptographically verifiable data structure; or
  2. a right or thing prescribed by the regulations; but does not include any right or thing that, under the regulations, is taken not to be a digital asset for the purposes of this Part.
• The definition reflects the ASIC definition and is written to be flexible as the use of digital assets in criminal offending evolves. This definition was submitted by ASIC to the Select Committee on Australia as a Technology and Financial Centre.^[1]
• A crypto-asset is a digital representation of value or contractual rights that can be transferred, stored or traded electronically. Crypto-assets use cryptography, distributed ledger technology or other technology to provide features such as security and pseudo-anonymity. A crypto-asset may or may not have identifiable economic features that reflect fundamental or intrinsic value.
• Section 3FA provides the following:
  • digital assets can be seized under a warrant in relation to premises 3FA(1);
  • digital assets can be seized under a warrant in relation to a person (3FA(2));
  • allows use of electronic equipment to seize (3FA(3));
  • allows use of electronic equipment to access data to determine the existence of digital assets that may be seized (3FA(4));
  • there is no authorisation to add, delete or alter data unless the warrant specifies, or it may cause any other material loss or damage to other persons lawfully using a computer (3FA(6));
  • a warrant authorises the executing officer or constable to operate electronic equipment the premises for the purpose of seizing a digital asset under the warrant (3FA(7));
  • defining ‘seize’ in the contact of a digital asset - under 3FA(8),  transferring the digital asset from an existing digital wallet or some other thing to a digital wallet or other thing controlled by the AFP or a police force of a State of Territory; 
  • time limits for seizing digital assets, and that assets can be seized beyond the expiry of the warrant being issued if the specified time frames in the act are beyond the expiry period (3FA(9) and (10));
  • that things done in relation to such warrants may be done remotely ((3FA(11) and (12)); and
  • Power under 3FA(10) to seize assets beyond the expiry of the warrant being issued if the specified time frames in other sections of the Crimes Act are beyond the expiry period. 

Proceeds of Crime Act

• The Proceeds of Crime Act provides authorisation to seize digital assets in the same manner as the amendments to 3FA of the Crimes Act, for an executing officer a person assisting.

National Anti-Corruption Commission Act

• The NACC Act provides authorisation to seize digital assets from premises or persons where the executing officer reasonably suspects the asset to evidence material in relation to an offence, or evidential material in relation to an offence that is an indictable offence, or to a corruption issue that the Commissioner is investigating. This is different from the 'reasonable suspicion' that an executing officer is required to have when carrying out a warrant under the Crimes Act and Proceeds of Crime Act.

The amendments to the Crimes Act, the Proceeds of Crime Act and the NACC Act provide comprehensive and broad authorisation for the seizure of digital assets. It’s likely changes will continue to be implemented as the use of digital assets evolves. 

This article was written with the assistance of Charlotte Pratt, Law Graduate. 

[1] Australia as a Technology and Financial Centre | Final report | Chapter 2 - Overview of digital assets markets and regulation.