UK Tax Authority Confiscates 3 NFTs in Fraud Case as a First
As part of its probe into a potential value-added tax (VAT) fraud, UK tax authority Her Majesty's Revenue and Customs (HRMC) has confiscated three non-fungible tokens (NFTs) in what represents the first seizure of such assets by a British government institution.
On HMRC’s initiative, three persons accused of attempting to defraud the agency of some GBP 1.4m (USD 1.9m) had been arrested, UK broadcaster BBC reported.
Nick Sharp, Deputy Director for Economic Crime at HRMC, said that the first confiscation of NFTs “serves as a warning to anyone who thinks they can use crypto assets to hide money from HMRC”.
The tax agency had secured a court order that allowed it to seize cryptoassets worth about GBP 5,000 (USD 6,000), and the three NFTs whose value is yet to be determined.
HMRC said the suspects allegedly used “sophisticated methods” to try to conceal their identities. These included employing false and stolen identities, false addresses, pre-paid unregistered mobile phones, virtual private networks (VPNs), false invoices, as well as pretending to carry out legal business activities.
In its analysis of the tax agency’s capacities related to crypto, UK British law firm Altion Law said HMRC “has the power to freeze cryptoassets, and seize them. This is a part of their HMRC Seizure and Freezing of Crypto Assets investigations.”
“HMRC can retain these assets for a number of years while their investigation is ongoing. <...> However, it is possible to raise a challenge and enter into negotiations with HMRC regarding the return of seized assets,” according to the law firm’s analysis.____Learn more: - Crypto Tax Trends in 2022: Increased Reporting, Updated Rules, and a Wealth Tax Debate- NFTs in 2022: From Word of the Year to Mainstream
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