Tuesday, May 24, 2022
HomeNFT NewsUK tax authority seizes first NFT in VAT fraud case

UK tax authority seizes first NFT in VAT fraud case

The tax authority made three arrests in connection to a suspected tax evasion using shell corporations and false identification.

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UK tax authority makes first NFT seizure in VAT fraud case

Her Majesty’s Revenue and Customs (HMRC), the chief tax authority in the United Kingdom, has seized three nonfungible tokens (NFT) associated with a suspected tax evasion fraud. The tax watchdog claimed that it was the first U.K. agency to seize NFTs. The NFT seizure came along with the arrest of three people who are suspected of evading taxes using various sophisticated means, reported the BBC.

The arrested suspects in the case reportedly used fake identities and created 250 fake “shell” companies to evade 1.4 million British pounds ($1.8 million) in value-added taxes.

HMRC obtained a court order to confiscate 5,000 pounds ($6,765) worth of digital assets along with three NFTs from the suspects. Nick Sharp, deputy director of HMRC, stated that the recent seizure and confiscation of NFTs in the tax fraud case serves as a warning to anyone trying to hide their assets from tax authorities. He said:

“We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets.”

Related: Laundering via digital pictures? A new twist in the regulatory discussion around NFTs

While the tax authority’s warning to the common public is routine, it is essential to note that the confiscated digital assets and NFTs were seized as assets, which is common in tax evasion cases for authorities to make up for the losses post-court proceedings. These digital assets and collectibles were not used to commit the crime.

NFTs bloomed to peak popularity in 2021 and have become a trend among brands and the public. The popularity of NFTs has increased and so have the use cases. This has made it a popular topic for regulators. These discussions are common and align with the traditional financial markets.

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Henry Hicks
Henry Hickshttps://nonfungibletalk.com
NFT and Crypto Enthusiast. Loves Travelling and Exploring the Metaverse!
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