UK authorities make the first seizure of NFTs in a tax crackdown.
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The UK’s tax body seized three non-fungible tokens (NFTs) and arrested three people on suspicion of attempting to defraud it of £1.4 million. This is a first for British authorities in the policing of digital assets, Telegraph reported. HM Revenue and Customs (HMRC) said the move was part of a probe into a suspected Value Added Tax (VAT) fraud involving 250 alleged fake companies.
The NFTs were seized alongside £5,000 of other cryptocurrencies.
VAT is a broadly based consumption tax assessed on the value added to goods and services. The NFTs were seized alongside £5,000 of other crypto assets. Officials told The Telegraph that the seizure was a “warning to anyone who thinks they can use crypto assets to hide money.” The UK tax body added that the suspects had used a raft of measures to cover their tracks, including pre-paid mobile phones, false addresses and invoices, and stolen identities. Authorities across countries are on high alert about the potential for dodgy dealings involving NFTs.
The Treasury Department warns against NFTs.
As reported earlier, the Treasury Department in the US released a report describing how the NFT art market fits into money laundering schemes. While NFTs may be used in financial crimes, the blockchain analysis firm Chainalysis reported that the amount of illicit funds laundered through them remains relatively small compared to total crypto-based financial crime. Illicit wallet addresses sent about $1.4 million to NFT marketplaces in Q4 2021 (the largest amount of all quarters last year). In contrast, an estimated $8.6 billion of cryptocurrency was used to launder funds in all of 2021.
Cryptocurrency
