UK tax authority seizes NFT in first VAT fraud case worth £1.4m

HMRC has, for the first time, seized non-fungible tokens (NFTs) in a probe into alleged VAT fraud worth £1.4m, according to BBC.

According to HMRC, three suspects used 250 fake companies in the scheme and employed “sophisticated methods” to conceal their identities. The measures included using fake or stolen documents, bogus addresses, prepaid unregistered mobile phones, VPNs and other means.

According to HMRC’s Deputy Director for Economic Crime, Nick Sharp, the first NFT seizure by law enforcement ‘will serve as a warning to all who think they can use cryptoassets to hide money from tax authorities’.

“We are continually adapting to new technologies to keep pace with criminals and tax evaders who try to hide their assets,” said Sharp.

HMRC secured a court order to seize cryptocurrency worth about £5,000 and three NFTs, the value of which has not yet been determined.

As Chainalysis noted a sharp rise in the flow of illicit proceeds in the NFT sector for laundering in the third quarter of 2021.

In January, the aggregate trading volume on the market for digital collectible assets reached a record $8.86 billion.