The Herald Scotland reports (archive) that a bitcoin trader recently had £5,500 seized by Scottish police under the Proceeds of Crime Act 2002 after his bank closed his account and requested he attend the branch to collect his cash. Having collected his cash as requested, Max Flores left the bank branch only to be greeted by police who absconded with the money despite not placing him under arrest. This act of theft was further supported by a court which allowed the thieves to keep Flores' cash for a period of three months while an investigation was carried out to established whether or not Flores was involved in money laundering.
Having failed to establish Flores was involved in any criminal activity despite suspicions to the contrary, Flores' cash was returned to him at a cost of approximately £1,200 in solicitor fees. Flores' solicitor Laura Irvine remarked:
The legislation tends to be used typically for drug dealers who there is maybe not enough evidence to convict them of any criminal offence, but there is plenty of intelligence in the background which suggests that is what they are up to. When money is found in their possession that they have no other explanation for then the default is that it is the proceeds of crime and the Crown can take it. However when you look at the circumstances of Flores case it may be a slightly less justified approach. There was evidence of money going through his bank accounts and it is correct to say that is typical of money laundering, and it is correct to say Max didn’t have an income at that point – so it may look on the face of it to be strange. But they certainly knew that bitcoin trading was in the background. That to me was the most disturbing aspect of this – there was no real identification of what the criminal conduct was.
A spokesman for the Crown Office and Procurator Fiscal Service was quoted as saying:
Trading in bitcoins is perfectly legal. In this case, however, suspicions were raised about the specific nature of some transactions. The cash was seized, pending an inquiry that was hampered by the individual’s initial refusal to provide any information about its source. Once the investigation was complete and no basis for forfeiting the cash had been established, it was handed back.