European Union (EU) negotiators have agreed on rules for new legislation that will allow governments to freeze and confiscate so-called “unexplained wealth” that’s believed to be connected to criminal activities.

Council Members have agreed on mandatory rules for the tracing, identification, freezing, confiscation and management of assets deemed as criminal property in an enhanced effort to fight organized crime, the EU says in a new press release.

The Council says that in the newly agreed upon text, EU member states must take sprawling measures to enable the freezing of property “in order to ensure an eventual confiscation” and to allow for a final conviction in the event of a criminal offence.

Not only will member states confiscate “criminal money,” they will also adopt rules that allow them to manage confiscated assets and ensure governments are confiscating property equal to the value “corresponding to the criminal yield.”

Says the press release,

“In a first for many member states, a new rule on the confiscation of unexplained wealth will, under certain conditions, allow the confiscation of property identified in the context of an investigation in relation to criminal offences, provided that a national court is satisfied that the identified property is derived from criminal activities committed within the framework of a criminal organisation and that those activities give rise to substantial economic benefit.

The agreement pays special attention to procedural safeguards.”

If wealth or property is transferred to a third party, the new measures allow governments to confiscate it if they decide that the receiver knew “or should have known” that the reason for the transfer was to avoid confiscation.

Says Félix Bolaños, Spanish minister for justice,

“The gains from criminal activities are staggering. Only if governments have the means to claw back these profits do they stand a chance of fighting organized crime.”

The basics of the new measure were agreed upon in mid 2023, and mentioned crypto assets by name.

The new agreement will now have to be endorsed by member states’ representatives within the Council.

If approved, the text will then go through the formal adoption process in both the Council and the European Parliament.

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United States banking giant JPMorgan debuted its in-house blockchain-based tokenization application, the Tokenized Collateral Network (TCN), on Oct. 11, according to Bloomberg. TCN settled its first trade for asset management giant BlackRock.

The Tokenized Collateral Network is an application that allows investors to utilize assets as collateral. Using blockchain technology, investors can transfer collateral ownership without moving assets in underlying ledgers.

In its first public collateralized trade between JPMorgan and BlackRock, the TCN turned shares of one money market fund into digital tokens, which were then transferred to Barclays bank as security for an over-the-counter derivatives exchange between the two companies.

The first internal test of the TCN was conducted by JPMorgan in May 2022, with a pipeline of other clients and transactions now that TCN is live. The TCN was launched to streamline and scale the process of traditional settlements on a blockchain. The use of decentralized technology made the process faster, more secure and more efficient.

Related: JPMorgan Chase enters generative AI race with IndexGPT trademark

According to Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, the new TCN platform unlocks capital and allows it to be used as collateral in ongoing transactions, boosting efficiency at scale. The platform enables the creation, transfer and settling of tokenized traditional assets. It also allows for the movement of collateral nearly instantly, unlike earlier methods.

The blockchain platform allows clients to access intraday liquidity through a secured repo transaction using tokenized collateral rather than depending on expensive unsecured credit lines. External clients who agree to the blockchain trade have their own node on which they can settle the trade and access other reports.

The U.S. banking giant has come a long way from its early days of criticizing the decentralized world and is currently actively involved in testing and launching various blockchain and crypto-centered services amid growing demand. The bank used a blockchain-based solution to settle trades with Indian banks in June.

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