The European Union and eight countries have signed an international treaty designed to strengthen authorities’ ability to trace, freeze, seize and confiscate assets linked to criminal activity, including cryptocurrencies.The agreement was signed in Strasbourg on October 14, 2026, during the Council of Europe’s Octopus Conference on cybercrime. Georgia, Greece, Hungary, Luxembourg, Monaco, Montenegro, San Marino and the United Kingdom joined the European Union as the first signatories.The agreement is an Additional Protocol to the 2005 Warsaw Convention, which establishes international standards for combating money laundering, terrorist financing and the movement of criminal proceeds. It modernizes existing asset recovery procedures to address increasingly sophisticated financial crime involving digital assets and cross-border transactions.However, signing the protocol does not immediately activate its provisions. Five ratifications, including at least three from Council of Europe member states, are required before it enters into force.
New Powers Cover Crypto Assets and Cross-Border Investigations
The protocol introduces expanded mechanisms for identifying and recovering assets suspected of originating from criminal activity. Authorities will be able to pursue confiscation of property connected to broader criminal conduct, including certain circumstances where a criminal conviction has not been obtained.The framework also permits action against assets held by third parties while preserving protections for legitimate owners acting in good faith. In urgent situations, authorities may freeze or seize assets without prior notification where advance warning could allow funds to be transferred or concealed.For cryptocurrency investigations, the protocol strengthens access to information held by financial institutions and virtual asset service providers. It also reinforces financial intelligence units and requires participating jurisdictions to establish offices responsible for tracing and managing criminal assets.Cross-border cooperation will include broader information sharing, joint investigations and direct communication between designated authorities. Asset recovery and management offices must respond to requests within prescribed deadlines, including within three days for urgent cases.These provisions are intended to address delays that can undermine investigations when criminal proceeds move rapidly between jurisdictions.
Ratification Required Before New Rules Take Effect
The protocol was adopted by the Council of Europe’s Committee of Ministers on May 15, 2026, before opening for signature in October. It supplements the Warsaw Convention rather than replacing existing national criminal laws or automatically granting unrestricted powers to confiscate cryptocurrency.The European Commission confirmed that the EU must complete additional approval procedures before the agreement becomes binding. Because the protocol covers responsibilities shared between the EU and its member states, its conclusion requires further institutional action, including consent from the European Parliament.The EU signed the original Warsaw Convention in 2009 but has not yet ratified it. The Commission also highlighted the scale of the asset recovery problem, estimating that only approximately 1% of criminal assets are recovered within the European Union.Under the new protocol, confiscated property should be returned as a priority to victims or legitimate owners. Where confiscated sums exceed €10,000, proceeds will generally be shared equally between participating countries, subject to the agreement’s provisions.The framework also encourages governments to use recovered criminal proceeds for public or social benefit. For cryptocurrency exchanges and other digital asset service providers, implementation could eventually increase the importance of recordkeeping, transaction monitoring and cooperation with international investigations.However, the protocol does not establish a universal mechanism capable of freezing every cryptocurrency wallet. Practical enforcement will depend on national implementation, jurisdiction, access to relevant assets and cooperation from intermediaries.The October signing marks an expansion of international legal cooperation, but its operational impact will depend on subsequent ratifications and implementation.