NFT seized by HMRC for first time in £1.4m fraud investigation
HMRC has seized three non-fungible tokens (NFT) as part of an investigation into a £1.4m tax evasion fraud.
The investigation into a suspected organised VAT repayment fraud, saw three NFTs seized. The fraud reportedly involved 250 fake companies.
HMRC has arrested three people on suspicion of attempting to defraud the tax authority of £1.4m. A court order saw the NFTs confiscated and detained. The NFTs are yet to receive a value however, there were £5,000 of cryptoassets seized.
HMRC seized the NFTs under the Proceeds of Crime Act 2002. Furthermore, the tax department has said it is the first UK agent to seize an NFT.
According to HMRC, the three suspects allegedly tried to hide their identities. They used false and stolen identities and addresses, along with using pre-paid unregistered mobile phones and virtual private networks (VPNs). Furthermore, false invoices were also used whilst pretending their involvement in legitimate business activity.
What is an NFT?
NFTs are assets in the digital space which have no tangible form. Each digital token has a unique digital signature. Digital tokens can be bought and sold using cryptocurrencies, in most cases Ethereum.
The deputy director of economic crime, Nick Sharp, said the first seizure of an NFT “serves as a warning to anyone who thinks they can use crypto assets to hide money from HMRC”.
“We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets.”
NFTs have considerably grown in popularity over the past year. In December 2021, the Financial Times reported the market for digital ownership certificates had passed £29.5bn. What’s more, this number is expected to increase further over the next year.
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This guide is an informative piece and does not constitute tax advice for individual matters.