UK Revenue Agency makes first NFT seizures in VAT fraud case

The HM Revenue Office has arrested three people for alleged tax evasion using shell companies and false identities.

The UK’s main tax authority, HM Revenue and Customs (HMRC), has seized three non-fungible tokens (NFTs) linked to alleged tax evasion fraud.

The tax watchdog claims it is the first law enforcement agency in the UK to seize an NFT. According to the BBC, while the NFT was seized, the police also arrested three suspects who used various sophisticated means to evade taxes.

The suspects arrested in the case reportedly used fake identities to create 250 fake "shell" companies to evade 1.4 million pounds ($1.8 million) in value added tax (VAT).

HMRC obtained a court order to seize $6,765 (£5,000) worth of digital assets, as well as three NFTs, from the suspects. Nick Sharp, Deputy Commissioner of HM Revenue and Customs, said the recent seizure of NFTs and digital assets in tax fraud cases is a warning to those trying to hide funds from the ATO. He said:

"We are constantly adapting to new technologies to ensure we keep pace with criminals and tax evaders hiding assets."

While HMRC's warnings to the general public are routine, it is important to point out that confiscated digital assets and NFTs were seized as assets, which is common in tax evasion cases, so that authorities can make up for the damage after court proceedings. loss. These confiscated digital assets and collectibles were not themselves used as instruments of crime.

The popularity of NFTs peaked in 2021 and became a trend among brands and the general public. As popularity and use cases have grown, legislators have also become a common regulatory topic. These regulatory discussions are fairly common and dovetail with traditional financial markets.