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HMRC UK first confiscates NFT as part of tax fraud investigation

CryptoPunk NFT at Sotheby’s June 4, 2021 in New York City.

Cindy Horde | Getty Images

LONDON – The UK Tax Service has confiscated three non-reciprocal tokens, considered to be the first confiscation of NFT by UK law enforcement.

Her Majesty’s tax and customs officials say they confiscated NFT during an investigation into suspicions of value added tax (VAT) fraud worth £ 1.4 million ($ 1.9 million).

The suspects allegedly tried to reclaim more VAT, which is a type of sales tax than they were entitled to, using a mixture of kidnapped individuals, unregistered phones and fake invoices to hide their identities. According to HMRC, 250 alleged counterfeit companies were involved in the scheme.

“Our first seizure of an irreplaceable token serves as a warning to anyone who thinks they may be using cryptocurrencies to hide money from the HMRC,” HMRC Deputy Director for Economic Crimes Nick Sharp said Monday.

“We are constantly adapting to new technologies to keep up with the way criminals and evaders are hiding their assets,” Sharpe added.

NFT is a one-of-a-kind digital asset designed to track the possession of virtual items, such as a work of art or a video game character, on a blockchain. Blockchains are digital book systems that underlie most major cryptocurrencies.

Demand for NFT has grown recently, with sales of such tokens exceeding $ 40 billion in 2021. However, the market prone to theft and fraudand there are fears that much of the trading activity in NFT has been fueled by market manipulation tactics such as trade with laundry.

HMRC says it is the first law enforcement agency in the UK to seize NFT. Authorities confiscated three NFTs representing digital art, as well as another £ 5,000 in other crypto-assets. NFTs have not yet been assessed, and the investigation is ongoing, HMRC said.

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HMRC UK first confiscates NFT as part of tax fraud investigation

CryptoPunk NFT at Sotheby’s June 4, 2021 in New York City.

Cindy Horde | Getty Images

LONDON – The UK Tax Service has confiscated three non-reciprocal tokens, considered to be the first confiscation of NFT by UK law enforcement.

Her Majesty’s tax and customs officials say they confiscated NFT during an investigation into suspicions of value added tax (VAT) fraud worth £ 1.4 million ($ 1.9 million).

The suspects allegedly tried to reclaim more VAT, which is a type of sales tax than they were entitled to, using a mixture of kidnapped individuals, unregistered phones and fake invoices to hide their identities. According to HMRC, 250 alleged counterfeit companies were involved in the scheme.

“Our first seizure of an irreplaceable token serves as a warning to anyone who thinks they may be using cryptocurrencies to hide money from the HMRC,” HMRC Deputy Director for Economic Crimes Nick Sharp said Monday.

“We are constantly adapting to new technologies to keep up with the way criminals and evaders are hiding their assets,” Sharpe added.

NFT is a one-of-a-kind digital asset designed to track the possession of virtual items, such as a work of art or a video game character, on a blockchain. Blockchains are digital book systems that underlie most major cryptocurrencies.

Demand for NFT has grown recently, with sales of such tokens exceeding $ 40 billion in 2021. However, the market prone to theft and fraudand there are fears that much of the trading activity in NFT has been fueled by market manipulation tactics such as trade with laundry.

HMRC says it is the first law enforcement agency in the UK to seize NFT. Authorities confiscated three NFTs representing digital art, as well as another £ 5,000 in other crypto-assets. NFTs have not yet been assessed, and the investigation is ongoing, HMRC said.

Reported by Source link

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