UK tax authority records first NFT seizure in VAT fraud case
The United Kingdom’s chief taxing authority, Her Majesty’s Revenue and Customs (HMRC), has reportedly seized three nonfungible tokens (NFT) suspected to have been involved in a tax evasion fraud.
The taxation watchdog has claimed that it is UK’s first law enforcement agency that has seized NFTs. As per BBC’s report, the NFT seizure has brought along the arrest of three people who are suspects of having evaded taxes through various sophisticated means.
The arrested suspects had used fake identities for creating 250 fake “shell” companies and evaded 1.4 million British pounds ($1.8 million) in value-added taxes, says media reports.
HMRC has obtained a court order of confiscating 5,000 pounds ($6,765) worth of digital assets in addition to three NFTs from the suspects. HMRC deputy director Nick Sharp has said that the recent seizure of NFTs and digital assets in the suspected tax fraud case is no less than a warning to those who are looking to hide money from the tax authorities.
Sharp reiterated that they were constantly adapting to new technology to ensure they keep pace with how criminals and evaders can potentially “conceal their assets.”
While the tax authority’s warning is common, it is essential to remember that the confiscated digital assets and NFTs have been seized as assets, which is a common issue in tax evasion cases for authorities who make up for the losses post-court proceedings.
NFTs have peaked in popularity in 2021 and have been trending among celebrities, brands and the public. As the use cases arise, the opinions of lawmakers are now becoming a common topic. These regulatory discussions are usually in alignment with the traditional financial market.