UK Makes Its First NFT Seizure In £1.4M Fraud Investigation

The messy world of non-fungible tokens—and, more specifically, the people who abuse it—is being brought to reckoning. Britain’s tax watchdog has seized three NFTs mixed up in suspected tax fraud in what looks to be the first crackdown of its kind in the UK.

According to Her Majesty’s Revenue and Customs (HMRC), via Bloomberg, the NFTs were seized in a probe for value-added tax (VAT) fraud worth £1.4 million (US$1.9 million). Law enforcement arrested three people over suspected attempts to deceive the tax authority and claim more VAT than they were entitled to.

The elaborate scheme consisted of the assumption of 250 alleged fake companies, the masking of identities and adoption of stolen and false identities, the use of bogus addresses and unregistered prepaid mobile phones, ill-intended use of Virtual Private Networks (VPNs), the signing of fake invoices, and staged methods to make the actors look like they were partaking in legitimate business practices.

The seized NFTs have not been valued yet. Apart from these, officials confiscated separate digital assets estimated to be worth around £5,000 (US$6,780).

“Our first seizure of a Non-Fungible Token serves as a warning to anyone who thinks they can use cryptoassets to hide money from HMRC,” warns Nick Sharp, HMRC’s Deputy Director Economic Crime.

Sharp stresses that the authority continually expands its technology “to ensure we keep pace with how criminals and evaders look to conceal their assets.”

Sam Roberts, a partner at legal firm Cooke, Young and Keidan, tells Bloomberg that citizens should rest easy that authorities “are continuing to support digital ownership rights, and we should expect to see more of this in future.”

[via Bloomberg and CNBC, cover photo 233637616 © Rokas Tenys | Dreamstime.com]