Started by Bitcoin, Feb 15, 2022, 06:30 am
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Shady activities abound in the NFT market. Three NFTs were seized by British authorities as part of a tax fraud probe. In order to defraud the UK tax authority of £1.4 million ($1.9 million), the suspects allegedly employed 250 bogus firms, fictitious identities, prepaid phones, VPNs, and other measures to obscure themselves.
Her Majesty’s Revenue and Customs (HMRC), the UK tax authority, has confiscated three non-fungible tokens (NFTs) as part of an investigation into a suspected VAT fraud involving 250 bogus companies.
HMRC claims to be the first UK agency to seize an NFT, and three people have been arrested on suspicion of attempting to defraud the government of $1.9 million.
The accused allegedly tried to claim back more VAT than they were owed by hiding their identities with a combination of stolen identities, unregistered phones, and fraudulent invoices. According to HMRC, the plan encompassed 250 purported phony entities.
Nick Sharp, HMRC's deputy director of economic crime, said in a statement Monday:
"Our first seizure of a Non-Fungible Token serves as a warning to anyone who thinks they can use cryptoassets to hide money from HMRC."
"We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets," Sharp added.
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 NFTs have been confiscated by UK law enforcement.
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The investigation hasn’t come to a conclusion yet. However, deputy head of economic crime Nick Sharp believes the seizures would “serve as a warning” to other would-be crypto fraudsters.
High-profile seizures by police have become increasingly prevalent as the value of cryptocurrencies has soared.
The US Department of Justice (DoJ) just confiscated Bitcoin worth more than $3.6 billion linked to the 2016 Bitfinex breach, with streaming giant Netflix already planning a documentary series on the largest-ever crypto crime.
BTC/USD trades at $42k. Source: TradingView
The latest case in the UK, however, is one of the first high-profile seizures of NFTs, which are digital assets designed to serve as proof of ownership for stuff such as art or photos stored on the blockchain.
It’s worth noting that, between 2020 and 2021, the amount of money invested in NFT companies surged by a staggering 130x, reaching $4.8 billion. Despite its growth, the new profession has been marred by controversy, especially in the areas of money laundering and fraud.
The major digital asset is the target of a large number of scams. An unnamed UK resident lost $200,000 after a woman he messaged on a dating app scammed him a few weeks ago. She urged him to put BTC in a shady application that promised to make him wealthy.
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Featured image from Unsplash.com, charts from TradingView.com
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