Legal Update: The UK Just Reversed the Burden of Proof in Crypto Scam Cases and It’s a Big Deal
A British man scammed out of over £520,000 in crypto just got it all back thanks to a new court power that puts the burden on fraudsters, not victims.
If you have ever worried about losing money to a crypto investment site, this one is for you, and it comes with a rare bit of good news. A crypto scammer thought he got away with over £500,000, until a new English law helped claw it all back. This is the first time victims have used a court power to recover stolen digital assets in full. Here's how it worked, and why it matters for crypto investors.
🌟 Crypto Scam Victim Gets £520,000 Back Thanks to a New UK Court Power
A man who was conned out of over £520,000 in a cryptocurrency fraud has just had every penny recovered by UK authorities. And yes, that’s every penny 🚀. This is the first known successful recovery of its kind using the new section 303Z51 of the Proceeds of Crime Act 2002 (“POCA”), which gives real legal restitution to victims of crypto fraud.
The facts are that the unlucky investor was lured into putting his money into what looked like a professional, well-built crypto investment platform. The kind with smooth UX, dashboards that mimic real exchanges, and fake customer support.
The platform wasn’t real. It was a well-disguised clone of a legitimate crypto site. The fraudsters had copied not just the design but also the interface behaviour. The victim transferred over £520,000 in crypto thinking he was investing. But there were no returns, no customer service (who disappeared), and certainly no legitimate trading. Just silence.
Then the funds were moved through various wallets, some frozen, some anonymised. This is usually the point where recovery becomes a nightmare, but not this time 🧨.
🏛️ Enter POCA section 303Z51: a quiet but powerful shift
The recovery became possible thanks to a legal provision tucked into the Proceeds of Crime Act 2002.
This new section of POCA came into force in April 2024 and allows victims of crypto scams to apply to a court to get their assets back even if the crypto is mixed up in a pool of funds.
Section 303Z51 works like this:
If your crypto has been seized or is part of a frozen wallet, you can apply to the court saying, "That’s mine!"
You don’t have to prove every detail of your transaction history.
Crucially, the burden of proof (used in criminal law) shifts to the fraudster to explain why the funds aren’t yours.
This is massive. Because crypto wallets are often used to blend, mix, and obfuscate transactions, it’s notoriously hard to separate clean from dirty coins.
But now the court is willing to treat pooled wallets like a hot tub of stolen goods. If the victim’s money is in there and the scammer can’t say otherwise, the victim can get it back.
This approach was tested successfully in this case involving the £520,000 crypto fraud.
What the court accepted, and why it is a game changer
In this case, the Crown Prosecution Service and a team of specialist barristers argued that the wallet where the crypto landed was under a freezing order. And, importantly, the funds weren’t clean before they arrived there, they had been part of a scam.
The victim didn’t have to trace the exact bitcoin or token to a precise location. The court accepted that the burden was on the scammer to prove which funds were not the victim’s. And since there was no such evidence, the court gave the green light to release the full amount back to the victim 🤝.
That simple idea, shifting the burden of proof to the fraudster, could redefine crypto recovery law in the UK. And if you are building, buying, or holding digital assets, it is a precedent worth watching.
Crypto crimes have outpaced law enforcement for years. Fraudsters love digital assets because they are fast, borderless, and often pseudonymous. Traditional civil recovery methods just couldn’t keep up.
Before this new POCA power, if your funds were stolen, you’d either:
Pay a fortune for private recovery lawyers;
Try civil court freezing orders, which are complicated and slow;
Or just accept the loss and move on, as many sadly do.
Section 303Z51 offers a rare state-led remedy that doesn’t require you to launch an entire private legal case. The mechanism is criminal in nature but opens the door to civil-like restitution for victims.
And it’s got teeth 🧡.
What does section 303Z51 actually say?
The actual legislative language is a bit dry, but here’s the essence (without putting you to sleep 😪):
If cryptoassets are frozen under a court order, a person who claims to own some or all of them can apply for release. The court can return them if:
You were deprived of them unlawfully;
They weren’t already "dirty money" before they were taken;
You genuinely own them.
And even if the scammer hasn’t objected, the court can go ahead and give it back to you, assuming it’s satisfied that the coins belong to you.
You don’t need a conviction first. You don’t need to win a drawn-out court case. You don’t even need to prove your losses beyond reasonable doubt. The court is invited to use common sense and a fair assessment, a dramatic shift from the rigid tracing requirements of traditional crypto cases.
There’s more.
If the authorities are in the middle of forfeiture proceedings, essentially trying to take the whole pot from the fraudster, your application can still be filed. It runs in parallel, meaning you don’t have to wait endlessly for resolution. The only limitation is that the crypto won't be released until those forfeiture proceedings have ended. But your claim is lodged, alive, and taken seriously.
In other words, this isn't just a legal safety net. It’s a live recovery route that’s quicker, fairer, and far more accessible than anything we've seen in this space before. If you're a victim of crypto crime and the assets are frozen, this section is your legal open door. Knock, and you might just get your coins back.
Crypto regulation often sounds reactive. This is proactive.
Too often, crypto-related laws come after the fact. After the hacks, the frauds, the rug pulls.
But section 303Z51 is different. It builds recovery and restitution into the enforcement process. It’s designed for this exact digital moment, where crime isn’t just done in cash or credit but with tokens and wallets and NFTs and everything in between.
It also reflects a changing mindset in the UK: that digital assets aren’t just exotic financial toys. They are property, with real value, and they deserve the same protection.
What’s next?
This recovery might just be the beginning. As more victims, lawyers, and enforcement bodies discover this new power, we could see:
More freezing orders applied to crypto wallets;
More victims applying under section 303Z51;
Faster asset recovery without needing full-blown litigation.
And in time, perhaps a shift in the perception of crypto from being a "wild west" to a jurisdiction with functioning legal remedies.
There are still gaps, of course. It won’t solve every scam. And enforcement remains tough when wallets are offshore or controlled by shell entities.
But as far as English law goes, this is a smart upgrade 🔄.