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UK Tax Authorities Seized NFTs For The First Time Ever

UK Tax Authorities Have Seized NFTs For The First Time Ever Because of Money Laundering

The UK’s tax authority, HM Revenue and Customs (HMRC), seized three non-fungible tokens (NFTs) through an investigation about possible tax fraud.  Although officials honored the seizure as a first for the U.K, there is a great probability that the seizure is only theoretical. As part of a value-added taxes (VAT) investigation involving 250 fake firms, the NFTs were seized. In the course of the inquiry, authorities detained three people on suspicion of cheating HMRC of $1.9 million.

To avoid detection by the police, the accused ones used different methods. They used VPNs, unregistered addresses, unregistered prepaid mobile phones, and stolen identities. Moreover, HMRC stated that to avoid VAT, they also generated fake invoices and pretended to be doing lawful commercial operations. According to HMRC, they were also able to catch $6,700 worth of cryptocurrencies and three NFTs after the suspect’s arrest.

Diving Into Details Of The NFTs Seizure

Nick Sharp, deputy director for economic crime at the HRMC, made a statement for the seizure of NFTs. He notes that anyone who believes they can use cryptocurrency to evade taxes should be aware of the consequences. Furthermore, Sharp adds that they are continuously adapting to new technologies. In light of this, they want to keep up with criminals and tax evaders as they hide their assets.

Authorities believe that this law enforcement seizure of non-fungible tokens is the first of its kind in the UK. As reported by Sky News, however, HMRC hasn’t physically seized ownership of the NFTs. However, it got a court order that prevents those digital artworks from selling. In addition, NFTs and cryptocurrencies have been detained while HMRC continues its investigation. Besides this, the warrant issued by HMRC is still unknown, and it’s not certain whether it will be able to stop the sale of NFTs.

It looks like no HMRC warrant will have any weight unless the NFTs are on a centralized exchange/platform operating in the United Kingdom. Law enforcement in the U.K will have difficulty approving a sale of the NFTs as long as the suspects are in jail. HMRC could only access the NFTs if they had the suspects’ wallets. Nonetheless, they would not access the tokens unless they also gained their private keys.

Given these points, if the HMRC is successful in gaining access. It is quite probable that Wilson’s Auctions will sell off the NFTs. For more information, Wilsons Auctions is the biggest private auction house in the United Kingdom and Ireland. It has previously auctioned off cryptocurrency confiscated by law authorities in the U.K.

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