The UK's tax authority has made several arrests regarding a suspected VAT fraud instance related to non-fungible tokens.
With NFTs emerging into mainstream media, there have been a lot more cases of malicious activity, especially rug pulls. However, some criminals took the liberty and used NFTs for tax evasion.
Just recently, according to a report by BBC, UK's tax authority HM Revenue and Customs retrieved non-fungible tokens from three suspects involved in almost a $1.9 million value-added tax (VAT) case.
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The authorities confiscated three separate NFTs and about $7k in cryptocurrencies. Suspects were reportedly creating numerous amounts of shell companies under fake identities to pull off the VAT fraud.
While the exact details of the case, and the value of seized digital assets are still unclear, the HMRC will be investigating the case further, while the Deputy Director of UK’s Economic Crime Nick Sharp assured that they "constantly adapt to new technology to keep pace with how criminals and evaders look to conceal their assets."
Non-fungible tokens or NFTs are digital pictures, artwork linked to an address that is stored on the blockchain. They are obtained via auctions, NFT marketplaces, and can have exclusive rewards attached to them including music streaming royalties, VIP tickets, etc.
