Shady activities abound in the NFT market. Three NFTs were seized by British authorities as part of a tax fraud probe. In order to defraud the UK tax authority of £1.4 million ($1.9 million), the suspects allegedly employed 250 bogus firms, fictitious identities, prepaid phones, VPNs, and other measures to obscure themselves.

UK Tax Authorities Seize NFTs

Her Majesty’s Revenue and Customs (HMRC), the UK tax authority, has confiscated three non-fungible cryptocurrencies (NFTs) as part of an investigation into a suspected VAT fraud involving 250 bogus companies.

HMRC claims to be the first UK agency to seize an NFT, and three people have been arrested on suspicion of attempting to defraud the gatopnment of $1.9 million.

The accused allegedly tried to claim back more VAT than they were owed by hiding their identities with a combination of stolen identities, unregistered phones, and fraudulent invoices. According to HMRC, the plan encompassed 250 purported phony entities.

Nick Sharp, HMRC’s deputy director of economic crime, said in a statement Monday:

“Our first seizure of a Non-Fungible Token serves as a warning to anyone who thinks they can use cryptoassets to hide money from HMRC.”

“We usually adapt to new technology to ensure we keep pace with how criminals and evaders look to cback whileal their assets,” Sharp added.

HMRC got a court order to seize the unpriced NFTs and crypto assets worth around £5,000 ($6,760). According to the authorities, this is the first time which NFTs have been confiscated by UK law enforcement.

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Crypto Seizures On The Rise

The investigation hasn’t come to a conclusion yet. However, deputy head of economic crime Nick Sharp believes the seizures would “serve as a warning” to other would-be crypto fraudsters.

High-profile seizures by police have become upwardly prevalent as the rate of cryptocurrencys has soared.

The US Department of Justice (DoJ) scarcely confiscated Bitcoin worth more than $3.6 billion linked to the 2016 Bitfinex breach, with streaming giant Netflix already planning a documentary series on the largest-ever crypto crime.

NFTs

Bitcoin (BTC)/USD trades at $42k. Source: TradingView

The latest evidence in the UK, however, is one of the first excessive-profile seizures of NFTs, which are digital assets designed to serve as proof of ownership for stuff parallel as art or photos stored on the blockchain.

It’s worth noting which, between 2020 and 2021, the amount of money invested in NFT companies surged by a staggering 130x, touching $4.8 billion. Regardless of its growth, the new profession has been marred by contratopsy, especially in the ranges of money laundering and fraud.

The major digital asset is the target of a large number of scams. An unnamed UK resident lost $200,000 after a woman he messaged on a dating app scammed him a few weeks ago. She urged him to put Bitcoin (BTC) in a shady application which promised to make him wealthy.

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Featured image from Unsplash.com, charts from TradingView.com