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UK taxman seizes NFTs in a $1.89 million tax fraud probe

The UK tax authority seized three NFTs in relation to suspected VAT fraud
Three persons have been arrested in connection to the incident
The HMRC cautioned against attempts to conceal assets using crypto

The United Kingdom’s tax authority, Her Majesty’s Revenue and Customs (HMRC) has conducted an NFT seizure in a suspected event of VAT repayment fraud.

According to a report first sent out by BBC, the HMRC confiscated three NFTs & $6,750 worth of other crypto assets and arrested three individuals with alleged involvement in the $1.89 million swindling attempt. The tax authority did not reveal the names of the individuals but said they used 250 illegitimate firms to conduct the suspected fraud.

Following the apprehensions, the authorities have established an investigation into the fraudsters’, who are thought to have employed sophisticated methods to mask their true identities. The authorities detailed that they used fake identification, unregistered phones, falsified invoices, VPNs, counterfeit addresses, among other means to obscure who they are.

While this is only the first seizure of its kind (NFTs) in the UK, Deputy Director of Economic Crime in the Fraud Investigation Service of HMRC Nick Sharp warned any persons thinking of pulling such a move – using cryptocurrency assets to conceal money.

“[The seizure] 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,” Sharp cautioned.

NFTs could be headed the same path as crypto

NFTs have largely stayed in the clear unlike cryptocurrencies when it comes to governmental action on blockchain-related assets. While crypto has been seized in several instances and banned in up to nine countries worldwide, NFTs have seen a much softer stance. Thailand is the only country to sanction an NFT ban.

However, the sector is becoming a growing hotspot of crime and fraudulent activity. The United States Department of the Treasury recently sent out a report that reviewed the use of art in money laundering and terror financing. The US authority warned that with a booming NFT sector, digital art could be used to facilitate laundering and fund terror activities as the price of the collectibles isn’t market-dependent but rather is determined by the buyer/ seller.

The Department also cautioned that even though NFTs can pinpoint their owners, traditional art platforms (galleries and auction houses) lack technical know-how of the underlying tech to establish customer identities.

The post UK taxman seizes NFTs in a $1.89 million tax fraud probe appeared first on The Home of Altcoins: All About Crypto, Bitcoin & Altcoins | Cointext.com.

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