UK tax authority seizes three NFTs in a £1.4M fraud case

The HM Revenue and Customs (HMRC), the tax authority in the United Kingdom (UK), has seized three non-fungible tokens (NFTs) involved in VAT fraud. The NFTs were linked to 250 “fake” companies.

HMRC is the first government institution in the UK to seize an NFT. The three people related to this case have been arrested for attempting to conduct a £1.4 million fraud.

A £1.4M NFT fraud case

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A report from BBC has stated that the individuals behind this attack had used “sophisticated methods” to conduct this fraud. They used these techniques to hide their identities, and instead, they used false and stolen names, fake addresses and unregistered mobile phones.

Additionally, they hid their internet activities using Virtual private Networks (VPNs). To hide their fraudulent business dealings, the individuals used false invoices and pretended to engage in legal business activities.

According to Nick Sharp, the deputy director of economic crime, the first seizure of an NFT in the UK could serve “as a warning to anyone who thinks they can use crypto assets to hide money from HMRC.” He further added,

We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets.

The tax authority further stated that it had secured a court order to hold the seized cryptocurrency assets. The crypto assets are valued at £5000 and three digital artwork NFTs are yet to be valued. The investigation on this matter is still in progress.

Regulations in the NFT sector

NFTs have created a lot of controversy in the crypto industry and beyond. While it continues to attract billions of dollars worth of trading volumes, many have termed the NFT sector a fad. The sector’s uncertainty has created debate on how investors could end up making major losses.

However, the increased hype surrounding NFTs has attracted the attention of regulatory bodies. The Thailand Securities and Exchange Commission is the only regulatory body that has banned NFTs and meme coins. NFTs continue to attract much interest despite the regulatory uncertainty, and some people are reaping big from this sector.