UK Insolvency Service Appoints First Crypto Intelligence Specialist

The UK Insolvency Service has appointed its first dedicated crypto intelligence specialist, aiming to trace and recover unaccounted-for cryptocurrency assets in bankruptcy and criminal cases.

The appointment of Andrew Small, a former police investigator with extensive experience in economic crime, was announced in a statement on June 9th. Small is set to lead efforts focused specifically on cryptoassets.

The demand for these specialized measures is driven by a dramatic rise in crypto-related insolvencies. According to the Insolvency Service data quoted, the number of such cases increased by 420% over the past five years. Concurrently, the estimated value of recovered crypto assets surged by a remarkable 364 times, reaching approximately £523,580 (around $709,500).

Speaking about the new role, Andrew Small emphasized the prevalence and recoverability of crypto assets: “There has been a rapid rise in crypto ownership in the UK, and alongside that, we’ve seen a similar rise in cryptoasset ownership in bankruptcy cases. … Crypto is very much a recoverable asset.”

Focus on Diverse Crypto Assets

The Insolvency Service, responsible for tracing assets in insolvency proceedings to repay creditors, stated Small’s expertise will cover the full spectrum of cryptocurrencies. This includes major types like Bitcoin (BTC) and Ether (ETH), as well as less conventional assets such as memecoins (e.g., Dogecoin) and NFT art.

Neil Freebury, Head of Intelligence at the Insolvency Service, anticipated that Small’s appointment would enhance investigators’ capabilities. “His appointment will help our investigators dealing with cases where cryptoasset ownership is a factor.” This statement underscores the growing necessity for specialized skills within the field.

Broader UK Regulatory Context

The increased focus on crypto recovery forms part of a wider push for regulatory clarity in the UK crypto sector. A concurrent development involves a new rule requiring crypto firms to report comprehensive customer transaction data.

Effective January 1, 2026, UK crypto companies will be obligated to record and submit details for every customer trade and transfer. This data includes user identifiers, addresses, asset details, and amounts moved, as part of the UK’s implementation of the OECD’s Cryptoasset Reporting Framework.

Crypto Ownership Growth in the UK

Underlying the Insolvency Service’s initiative is the clear trend of rising crypto asset ownership by UK residents. According to a study cited by the FCA from November 2024, the percentage of UK adults holding crypto assets jumped from 4% in 2021 to 12% in 2024. The average value held by these individuals reached approximately £1,842 ($2,496).