In a landmark case, the UK’s ‘Unexplained Wealth Order’ has been used against Zamira Hajiyeva, the wife of an ex-banker. This is the first time the anti-corruption law has been used and Hajiyeva will need to explain how she acquired the funds for the GBP 15 Million London home to a high court judge. She will also need to provide evidence to the National Crime Agency (NCA). Crypto holders could do well to take note, as a class of citizens who have acquired significant wealth in a short space of time.
What is an Unexplained Wealth Order?
The UWO is a new power which is designed to prevent corrupt foreign officials from laundering money through the UK. The order essentially creates a positive onus on wealthy individuals to disclose their wealth. This is because, according to the NCA, it is very difficult to prosecute individuals who are laundering these funds. If a suspect cannot supply a legitimate source of funds on demand, then the NCA can apply to the high court to seize the property. The UWO does not imply any wrongdoing on behalf of the participant – it is just an order to explain the acquired wealth.
In this instance, the case is severe. Zamira Hajiyeva’s husband was convicted in 2016 for embezzlement at a large bank. And over the course of 10 years, she would spend over GBP 16 Million on the estate, spending up to GBP 150,000 on a luxury watch in a single day. However, while the order might be justified in this instance, it raises ominous signs for the balance of power in the UK administrative system.
An incredibly dangerous precedent – especially for crypto holders
The constitutional standing of such an order is questionable. An order that justifies individuals to disclose their wealth with no evidence of wrongdoing is an incredibly dangerous precedent to set. ‘Innocent until proven guilty’ has, in this instance, been replaced with ‘guilty unless able to prove innocent’ in a very bizarre twist of natural justice. It violates legal principals and is symbolic of a state executive that has too much power.
This type of legal overextension is likely to make its way to the vast majority of cryptocurrency holders and other individuals who are required to account for themselves in court, in order to ‘justify’ their position to state branches. This represents the polar opposite of the decentralized cryptocurrency ethos – autonomy, liberty, and individual freedom, where people should not be subject to legal scrutiny without the appropriate evidence provided in advance. The ‘dirty money’ mentioned by the NCA is going to be conflated with crypto holders who have innocently invested in decentralized technology, and they will be branded as ‘criminals’ and ‘tax cheats’. This is in spite of the fact that fiat money is used far more frequently than cryptocurrency for criminal purposes.
Even if the application of the UWO seems correct based on the facts of this particular case, the power itself is in violation of basic legal principals and should not be granted in modern democratic nations.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.