HMRC, the UK tax authority, has reported its first ever seizure of non-fungible tokens (NFTs), following a probe into an alleged £1.4 million VAT fraud.
The HMRC investigation involved over 250 sham companies, resulting in three NFTs being confiscated, along with £5,000 in other cryptoassets.
Three people were also detained following allegations they used a variety of ‘sophisticated methods’ to try and conceal their identities, such as false invoices, pre-paid unregistered mobile phones and virtual private networks.
NFTs act as certificates representing ownership of virtual assets, using block chain technology to digitally collect and own the virtual content.
NFTs can be bought and sold in crypto or traditional currencies but have no tangible form. They can represent assets such as digital artwork, images, music, or tweets that have their own unique signature and cannot be exchanged for another asset of the same type.
HMRC said it is the first example of seizing an NFT and is using the case as a warning against using cryptoassets to hide money from authorities.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing Agency for the Professional Services Sector.
