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UK Tax Authority Seizes NFTs in VAT Fraud Case

UTC by Kofi Ansah · 3 min read
UK Tax Authority Seizes NFTs in VAT Fraud Case
Photo: Shutterstock

The alleged suspects also reportedly used prepaid unregistered mobile phones, VPNs as well as fake company invoices in their quest to evade millions in tax.

The United Kingdom’s chief tax authority, HM Revenue and Customs (HMRC) has seized three non-fungible tokens (NFTs) from a suspect as part of a probe into a VAT fraud case. According to reports from the British media, the HMRC is the first British group to make an arrest related to digital assets.

The three suspects arrested by the tax authority are alleged to have attempted to defraud the country of £1.4 million ($1,892,296) through 250 alleged fake companies and identities.

The alleged suspects also reportedly used prepaid unregistered mobile phones, VPNs as well as fake company invoices in their quest to evade millions in tax. VAT (Value Added Tax) is a broadly based consumption tax assessed on the value added to goods and services.

HMRC also seized £5,000 ($6,765) worth of other digital assets with the help of a court order. Nick Sharp, the deputy director of HMRC speaking after the bust, issued a warning to the general public, stating that the recent seizures of NFTs and digital assets in the tax fraud case should serve as a deterrent to those looking to hide money from the tax authorities.

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

NFTs have become somewhat of a hot cake now after they boomed in 2021, setting a common trend in the crypto space. NFTs rise in popularity has also placed it under the radar of law authorities as many of them believe there is a potential for it to be used in illegal deals.

The United States Treasury Department, earlier this month, released a report describing how the NFT art market fits into several money laundering schemes. Even though crypto-based financial crimes towers over NFT-related financial crimes in terms of numbers, NFT’s have been proven to be involved in financial crimes, according to the blockchain analysis firm Chainalysis.

The firm reported earlier this year that, about $1.4 million was sent to NFT marketplaces by illicit wallet addresses in the fourth quarter of 2021, a figure which was the largest amongst all the quarters, whiles an estimated amount of $8.6 billion worth of cryptocurrency was used to launder funds in all of 2021.

The US Justice Department, just last week, also recovered $3.6 billion worth of bitcoin (94,000 BTC)stolen by a couple of six years ago. The couple, according to authorities, were involved in a crypto scam where they bought gold and digital NFTs with the money they swindled from their victims. The duo were arrested and charged and are currently facing a lengthy sentence of almost 20 years in prison.

Blockchain News, Cryptocurrency news, News
Kofi Ansah
Author Kofi Ansah

Crypto fanatic, writer and researcher. Thinks that Blockchain is second to a digital camera on the list of greatest inventions.

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