The UK taxation authority (HRMC) has just confiscated three non-fungible tokens (NFT). HMRC claims to be the first authority in the UK to confiscate NFTs.
The seizure relates to a £1.4 million fraud case, in which three people have been arrested. HMRC said the value of the three NFTs seized was unknown, but they also seized £5,000 worth of crypto assets.
According to HMRC Deputy Director of Economic Crime Nick Sharp, this seizure is a form of warning to anyone who thinks they can use crypto assets to hide money from HMRC.
"We are constantly adapting to new technology to ensure we are following the ways criminals and tax evaders hide their assets," Sharp said.
Fraud related to this value added tax allegedly involved 250 companies. The three detained suspects used various means to hide their activities from HMRC, including fake addresses, prepaid cell phones, VPNs and stolen identities.
Given that NFT does not exist and is stored on the blockchain, HMRC did not take control of the digital asset, but instead used a court order to prohibit the sale of NFT.
As the popularity of cryptocurrencies has increased, the seizure of large amounts of digital assets has become more and more common. Recently, the US Department of Justice confiscated $3.6 billion worth of cryptocurrencies linked to the 2016 Bitfinex hack.
But this includes one of the first high-profile NFT seizure cases, where the seized assets are proof of ownership of media such as photos or music stored on the blockchain.