Certain NFT works of art are seen at Christie’s in New York on September 28, 2021. NFTs can be various digital assets that track ownership of certain items, such as works of art. File photo by John Angelillo/UPI | License picture
February 14 (UPI) — Britain’s tax collection agency said on Monday it had seized three non-fungible tokens – better known as NFTs – and three people had been arrested in connection with a fraud case worth nearly $2 million.
Her Majesty’s Revenue and Customs said in a statement emailed to UPI that the seizure would be the first for a UK agency involving NFTs.
NFTs are digital assets that track ownership of certain items, such as works of art, memorabilia, and writings. About a year ago, Twitter founder Jack Dorsey sold his very first tweet from 2006 as NFT for nearly $3 million. In December, a programmer sold the world’s first SMS text message as an NFT for $120,000.
“Our first seizure of a non-fungible token serves as a warning to anyone who thinks they may be using crypto assets to hide money from HMRC,” Nick Sharp, HMRC’s deputy director for economic crime, said in the statement.
“We are constantly adapting to new technologies to ensure we keep pace with how criminals and escapees seek to hide their assets.”
The watchdog said it obtained a court order to seize three digital artworks, which have not been appraised for their value, and more than $6,700 of other crypto assets. HMRC can seize assets under UK law to satisfy confiscations.
Jake Moore, an adviser to cybersecurity firm ESET, said police can “request to keep half of the confiscated property” – and the other half will go to the UK Home Office.
“The key design of cryptocurrencies is to keep them secure and protected from interception by anyone, whether it’s a threat actor or law enforcement,” Moore said in a statement.
“But with a rapidly changing digital world where mistakes can be made, law enforcement is starting to turn the tide in how they investigate digital crime, locate evidence and finally seize digital assets.”
Authorities said the unidentified suspects were using fake companies, identities and addresses to earn more value-added tax, which is similar to sales tax, than they were owed. HMRC said it used a variety of “sophisticated methods” in the scheme.