New Council of Europe protocol aims to strengthen crypto-asset recovery
Crypto-assets move quickly. Tracing who controls them and coordinating action across borders can take much longer. A new Council of Europe protocol is designed to help authorities recover criminal proceeds, including digital assets. It also raises questions about safeguards, national capacity and how to balance swift enforcement with due process.
- Authorities may freeze or seize assets urgently without prior notice.
- Urgent cooperation requests require a response within three days.
- Confiscation without a criminal conviction is allowed only in specified circumstances.
- Victims and legitimate owners take priority when assets are returned.
What the protocol provides
The additional protocol strengthens the 2005 Warsaw Convention, a Council of Europe framework for combating money laundering and terrorist financing. It was agreed in May 2026 and opened for signature on October 14, 2026, during the Octopus conference in Strasbourg, which ran from October 14 to 16.
The Council of Europe named Georgia, Greece, Hungary, Luxembourg, Monaco, Montenegro, San Marino and the United Kingdom as the first eight of its 46 member states to sign. It also reported that the European Union and its 27 member states signed.
The Council of Europe is separate from the European Union. Signing a treaty does not mean ratifying it, and signatures alone do not put the protocol into force. Its binding effect depends on ratification and the protocol’s entry-into-force requirements.
The protocol aims to improve cooperation among authorities that trace, freeze, seize and manage criminal assets. It requires states to establish asset-recovery and asset-management offices. These offices must respond to cooperation requests within set deadlines, including within three days in urgent cases. That means responding within three days, not locating or recovering assets in that time.
In crypto cases, funds may move between wallets or services before authorities identify who controls them, obtain relevant information and coordinate action across jurisdictions. The legal power to freeze assets does not, on its own, solve those practical problems or ensure a firm or intermediary can act immediately.
Speed and safeguards must go together
Where appropriate, authorities may freeze or seize assets urgently without prior notice. The aim is to reduce the risk that suspected proceeds will be moved or concealed before officials can act.
The protocol also allows confiscation without a criminal conviction in specific circumstances, including certain cases involving property connected to wider criminal conduct. It may also apply to assets held by third parties. These are not blanket powers to seize unexplained property. Their use is subject to the protocol’s conditions and safeguards, as well as national implementation. Domestic procedures and judicial oversight will matter, especially when someone other than the suspected offender claims the assets.
Confiscated assets are to be returned “as a priority” to victims or legitimate owners. As a rule, sums above €10, 000 ($11, 126) are to be shared equally between the countries involved. The Council of Europe also encourages states to use confiscated assets for social or public benefit.
Giving victims priority is welcome, but recovery does not automatically establish who was harmed or whose claim is valid. Competing claims and cross-border procedures can delay restitution. Effective enforcement requires more than speed. It also depends on evidence, transparent processes and meaningful protection of property rights.
“Criminal money sustains organized crime. It also buys what should never be for sale: our democracies. Taking that money away is democratic security.”
, Alain Berset, Secretary General of the Council of Europe
Berset also said: “No state can recover criminal assets across borders on its own. With this protocol, none will have to.” The framework is meant to make cooperation more systematic. Its success will depend on ratification, domestic laws, trained staff and the technical capacity to handle complex cases.
How it differs from crypto tax reporting
The protocol serves a different purpose from the OECD’s Crypto-Asset Reporting Framework (CARF) and the European Union’s DAC8 directive. CARF, introduced by the OECD in 2023, supports the exchange of tax-relevant information reported by crypto-asset service providers. The OECD reported that, as of September 2026, 77 jurisdictions had committed to implementing the framework on different timelines, with initial exchanges scheduled from 2027 onwards. A commitment does not mean implementation is complete.
EU member states were required to apply DAC8 from January 1, 2026. The directive extends tax-authority cooperation to digital assets, with reporting and information exchanges following its timetable.
CARF and DAC8 focus on tax transparency and information exchange. The Council of Europe protocol deals with the legal and institutional steps needed to trace, freeze, seize and confiscate criminal proceeds. Better reporting can help authorities follow a trail, but it cannot recover assets or settle ownership disputes on its own.
Key questions about the protocol
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Does the protocol cover crypto-assets?
It is a broader criminal-asset framework, not a crypto-only treaty. It is intended to cover digital assets as part of cross-border recovery efforts.
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Can authorities freeze assets without warning?
They may freeze or seize assets urgently without prior notice where appropriate. The three-day deadline is for responding to urgent cooperation requests, not completing a recovery.
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Can assets be confiscated without a conviction?
Yes, but only in specified circumstances and subject to safeguards and national implementation. The protocol may also apply to certain assets held by third parties.
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Is the protocol already in force?
The reported signatures do not mean it is in force. Signing and ratification are separate steps, and entry into force depends on the protocol’s ratification requirements.
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Who receives recovered assets?
Victims and legitimate owners have priority. As a rule, sums above €10, 000 ($11, 126) are shared equally between the countries involved.
For crypto users, the protocol is a reminder that digital assets are not beyond law enforcement’s reach just because they move online. For governments, the test is whether they can pursue criminal proceeds without treating speed as a substitute for evidence, accountability or the rights of people whose property is caught up in a case.
