UK Tax Authority Seize NFTs in $1.8M Fraud Case
In a first of a kind, the United Kingdom’s tax authority, Her Majesty’s Revenue and Customs (HMRC) have seized three NFTs, according to a report from BBC. The agency claims that the suspects used sophisticated methods to mask their identities, including stolen identities, VPNs, false invoices, and addresses, among other things.
The NFTs were seized alongside crypto-assets worth about £5,000. The investigation is still ongoing and could spark further inquiry into the NFT market.
Commenting on the development, deputy director of economic crime Nick Sharp said:
“[this] serves as a warning to anyone who thinks they can use crypto assets to hide money from HMRC. We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets.”
NFTs Catches Regulators' Eyes
NFTs exploded to peak popularity in 2021 and went on to become a common regulatory topic for lawmakers. Earlier this month, the US Treasury Department released a report describing how the NFT art market fits into money laundering schemes. However, the Thai SEC, so far, is the only regulator to have banned NFTs alongside memecoins.
However, blockchain analysis firm Chainalysis recently reported that the amount of illicit funds laundered through NFTs remains relatively small compared to total crypto-based financial crime.