The UK’s tax department, Her Majesty’s Revenue and Customs (HMRC), says it’s the first authority in the country to seize an NFT, BBC News reports. Three people were arrested in connection with a PS1.4million (roughly $1.9million) fraud case. The authority seized PS5,000 worth of crypto assets (around $6,762) alongside three NFT artworks which have yet to be valued.
As cryptocurrencies have increased in value, authorities are increasingly taking high-profile seizures. Just this month the USA’s Department of Justice seized $3.6 billion worth of cryptocurrency linked to the 2016 Bitfinex hack. This is the first major seizure of NFTs, digital assets used to prove ownership of media such as images and songs.
According to HMRC’s deputy director of economic crime, Nick Sharp, the authority “constantly adapt[s] to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets.” He told BBC News the seizure “serves as a warning to anyone who thinks they can use crypto assets to hide money from HMRC.”
The suspected fraud is alleged to have involved 250 fake companies, and the three suspects apparently used everything from fake addresses, pre-paid phones, VPNs, and stolen identities to hide their activities from HMRC. Sky News reports that HMRC has not taken control of the NFTs, but that it is using a court order to prevent them from being sold.
This is not likely to be the last time that authorities seize NFTs. Recently an IRS special agent noted that the agency is increasingly focusing on crypto-assets because of the “mountains” of fraud it’s seeing in the area, Bloomberg Quint reported. With individual NFTs being sold for millions as part of an industry valued at around $16 billion, it’s inevitable that authorities will start becoming more involved.
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