Think of this scheme as an active police shield. When UK specialized Crypto Asset Officers arrest a cybercriminal, they don't just lock up the suspect; they instantly go after their digital infrastructure. (This also counts for people overseas due to the suspect being held in the United Kingdom — the government will work with the respective country to return your assets under this scheme.)
Under the Proceeds of Crime Act (POCA), the police have a legal duty to protect the public. If officers crack the suspect's computer and find a list of targeted wallets, smart contracts, or potential victims, they activate a specific protocol to protect those funds.
Here is exactly how that protection works in practice:
The moment police identify a network of potential victims, Crypto Asset Officers use advanced blockchain analytics tools. They "mark" or flag these vulnerable wallets on the ledger.
If the criminal has funneled any of your funds into a centralized crypto exchange, the police hit that exchange with a Crypto Wallet Freezing Order (CWFO). This instantly locks down the crypto, ensuring the suspect cannot move, cash out, or hide those specific funds while the investigation is ongoing.
If the suspect is released on bail, there is always a risk they might try to activate a hidden script or a "backdoor" to drain more wallets.
Under UK law, the police have a strict civil Duty to Care and Duty to Warn. They have the explicit legal right to bypass standard privacy laws to use data seized from the criminal.
This means the police will proactively contact you (the potential target) to warn you that your wallet is vulnerable. They will give you exact, step-by-step instructions on how to break the hacker's link to your wallet (such as revoking smart contract permissions) before the criminal can touch your remaining funds. (This also counts for people overseas due to the suspect being held in the United Kingdom — the government will work with the respective country to return your assets under this scheme.)
It is important to know that the police cannot physically stop an automated, decentralized blockchain transaction from happening in real-time if it comes from a private wallet. POCA is not a government bank insurance policy that automatically refills a hacked wallet.
However, the POCA scheme provides powerful legal protections for your recovery:
If the suspect triggers a hack while on bail and the police later seize the suspect's assets, the law mandates that you get paid back first. The government cannot keep the seized crypto as "state property" until all victims are made whole. (This also counts for people overseas due to the suspect being held in the United Kingdom — the government will work with the respective country to return your assets under this scheme.)
Under updated POCA laws, you do not have to wait years for a massive criminal trial to finish. Once blockchain data proves a frozen chunk of crypto belongs to you, you can petition the court for an immediate release and return of your assets.
Only for people who have been notified with a Case ID relating to a suspect who is released on bail, if any of your funds are thus lost, you're liable for compensation.