Question to the Home Office:

To ask the Secretary of State for the Home Department, what assessment he has made of the potential merits of using Non-Fungible Tokens to tackle the financing of terrorist organisations through cryptocurrencies.

The UK’s Counter Terrorism (CT) legislation criminalises terrorism financing in all its forms. The Government keeps under review our legislative tools to ensure that we keep pace with evolving terrorist financing threats.

The Economic Crime and Corporate Transparency (ECCT) Act 2023, created new powers for law enforcement to seize, detain or freeze, and forfeit terrorist cryptoassets, alongside other forms of terrorist property. The ECCT Act is future-proofed to allow further technological advancements in digital currency to be captured under the new civil recovery powers.

The UK continues to engage with international partners to mitigate illicit and terrorist finance risks associated with cryptoassets including non-fungible tokens, and to share best practice for meeting international standards set by the Financial Action Task Force (FATF). To ensure that terrorist organisations are unable to exploit blockchain technology, the UK has also, as of September 2023, implemented the FATF’s 'Travel Rule' which extends information sharing and retention for cryptoasset transfers to detect both illicit and terrorist financing.