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UK's HMRC Makes the First NFT Seizure in Tax Evasion Scandal - Blockchain.News

UK's HMRC Makes the First NFT Seizure in Tax Evasion Scandal

Godfrey Benjamin Feb 15, 2022 03:45

Her Majesty’s Revenue and Customs (HMRC) have nabbed three suspected tax evaders, as well as three NFTs.

UK's HMRC Makes the First NFT Seizure in Tax Evasion Scandal

The United Kingdom’s tax authority, Her Majesty’s Revenue and Customs (HMRC) have arrested three suspected tax evaders and seized three Non-Fungible Tokens (NFTs), a confiscation that marks the very first of them that it's kind from any law enforcement agency in the country.

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Per a BBC report, three suspects were allegedly involved in data fraud and made attempts to defraud the HMRC with the sum of £1.4 million in taxes due.

Tax watchdogs worldwide have been attempting to intensify efforts to crack down on tax evaders, even though crypto regulations are non-existent in most countries. In the UK, digital assets, NFTs inclusive, are regarded as tradable commodities, and by virtue of this, they are bounded by extant tax regulations.

HMRC investigators involved in the case said the suspects used false identities to create as many as 250 shell companies, all to money laundering and evade taxation alongside. 

They were noted to use several subtle strategies and “sophisticated methods” to try to hide their identities, including false and stolen identities, false addresses, pre-paid unregistered mobile phones, Virtual Private Networks (VPNs), false invoices, and pretending to engage in legitimate business activities.

However, these suspects are not as invincible as they thought they were, leading to the arrest.

This arrest and NFT confiscation should “serve as a warning to anyone who thinks they can use crypto assets to hide money from HMRC,” said Nick Sharp, deputy director of economic crime, “We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets.”

Beyond taxation, it is obvious that enforcement agencies are particularly patient in following all money trails to bring criminals to book. As reported by Blockchain.News last week, the Department of Justice announced it had arrested a New York-based couple for being the mastermind behind the 2016 Bitfinex exchange hack. American movie giant Netflix Inc has planned a documentary series for the entire event.

Image source: Blockchain.news