February 15, 2022

UK Seizes NFTs in Tax Fraud Case

For the first time in the history of Britain’s law enforcement, non-fungible tokens (NFTs) have been seized in connection with a fraud case.

In recent years, NFTs – collectable digital assets representing real-world items like artwork and videos that can be bought and sold, but which have no tangible form of their own – have become sought after, particularly by wealthy buyers.

However, according to reports on Monday, 14 February, Her Majesty’s Revenue and Customs (HMRC) seized crypto assets valued at £5 000, as well as three yet-to-be-valued NFT artworks, during an investigation into a suspected value-added tax fraud scheme worth £1.4 million.

Nick Sharp, HMRC’s deputy director of economic crime, explained that three suspects – who have since been arrested – made alleged use of 250 fake companies, false addresses, and prepaid unregistered mobile phones to defraud the taxman.

“Our first seizure of a Non-Fungible Token serves as a warning to anyone who thinks they can use crypto-assets to hide money from HMRC,” said Sharp. “We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets.”