Friday, September 30, 2022

British Tax Watchdog Confiscates NFTs in Suspected Fraud Case

Her Majesty’s Revenue and Customs (HMRC) announces that it has detained three persons and confiscated some Non-Fungible Tokens (NFTs) on possible acts of defrauding the tax authority to the tune of £1.4 million, as first reported by BBC News on Monday.

Barely a week after findings were made by the United Nations about North Korea financing their missile program through stolen crypto, HMRC through BBC announced that it has seized three NFTs owing to suspected tax evasion, a crime that has seen the arrest of three individuals, and reiterates the consistent involvement of digital assets in fraudulent activities.

The accusations levied against the arrested individuals are linked to suspected tax fraud. This fraud involves one of the alleged offenders using various intelligent and technical means to conceal their identities, including using untraceable burner phones, misleading and stolen IDs, fake invoices, making the proponents of these acts present themselves as legitimate businesses, as uncovered by HMRC investigators.

Further in the report, HM Revenue and Customs claim to be the first government regulatory body in the United Kingdom to effect the seizure of NFTs. The deputy director of economic crimes, Nick Sharp said that this first step it’s taking in bringing cyber hackers to book will serve as a warning to other players in the act of using digital assets to hide funds from the British tax regulatory body.

“We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets,” he said.

The British tax regulatory body also claims that the digital assets that it confiscated are worth about £5,000, alongside the three digital artwork NFTs. These exhibits were acquired by a court order. The non-fungible tokens are yet to be valued as investigations are still ongoing.

While it is true that BTC is the answer to digital forms of payments, making the carriage of tangible cash unnecessary, NFTs are also believed to be the solutions aimed at revolutionizing digital collectibles.

However, eyebrows are raised at the vulnerability of digital assets, as developments are still being made to improve the security of the crypto space, hence protecting users from hackers, while also protecting the regulators from potential tax evaders.

Israel Love
Israel Love is a passionate writer that enjoys educating and inspiring people through his writing. This passion fuels the desire to simplify the complexities in the blockchain ecosystem, by providing viable information about the crypto space in such a way that makes it easy for anyone to understand. Israel love also has interests in Human Resource Management as he is a trained expert in HR.

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