Authorities in the UK Seize NFTs Worth $1.9 Million In Suspected Tax Evasion

The non-fungible token market is riddled with shady deals, which UK authorities seek to clean up. According to a credible source, HM Revenue and Customs confiscated three NFTs as part of an investigation into alleged tax evasion. The suspects reportedly utilized 250 bogus firms, fictitious identities, prepaid phones, VPNs, and other methods to conceal their identities while attempting to cheat the UK tax authority of £1.4 million (almost $1.9 million).

HMRC got a court order to seize the unvalued NFTs and crypto assets worth around £5,000 ($6,760). According to the authorities, this is the first time that UK law enforcement has confiscated NFTs.

The probe is still underway. Economic crime deputy director Nick Sharp, on the other hand, hoped the seizures would “act as a signal” to future would-be crypto fraud criminals.

The lack of rules and other safeguards around NFTs has resulted in substantial issues with fraud and scams, such as self-sales to inflate prices (also known as wash trading) and phony or plagiarized tokens. Cent recently blocked most transactions because of “rampant” sales of counterfeit tokens, while marketplace behemoth OpenSea has been trying to implement protections after discovering that 80 percent of NFTs generated using a free tool were fakes, clones, or spam. Expect more seizures like this one, at least until NFT marketplace owners have additional tools to deter fraud and other bad practices.