HMRC seizes NFT for first time in PS1.4m fraud case

Three Non-Fungible Tokens were seized by the UK tax authorities as part of an investigation into suspected VAT fraud that involved 250 fake companies.

HMRC seizes NFT for first time in PS1.4m fraud case

HM Revenue and Customs (HMRC), said that three individuals were arrested for attempting to defraud the agency of PS1.4m.

According to the authority, it was the first UK law enforcement agency to seize an NFT.

NFTs are digital assets that can be purchased and sold but do not have a tangible form.

Digital tokens were created in 2014. They can be viewed as certificates of ownership of virtual or physical assets. Each NFT has a unique digital signature that allows them to be purchased and sold in traditional or crypto currencies, like Bitcoin.

While Bitcoin has been described as a digital solution to currency, NFTs are being hailed by many as the digital solution to collectables. However, many sceptics worry that they could burst.

What is the working principle of NFTs?

Paintings are a classic work of art that is valuable because they are unique, but digital files are easily and endlessly copied.

Tokenization is a way to make artwork digitally ownership-proof. This allows you to buy and sell. Tokens can be used to represent real-world objects like artwork, music, and videos.

As with crypto-currency a record of who is the owner is kept on a shared ledger called , also known as.

Because the ledger is kept by thousands of computers all over the globe, it cannot be falsified. Smart contracts can be included in NFTs that allow the artist to take a portion of future sales of the token.

Although anyone can sell their work as an NFT, it is possible to tokenize your work. However, recent headlines about multi-million-dollar sales have fueled interest.

A popular meme featuring a 2-year-old girl was sold by NFT as a $74,000 (PS54,000), image in September 2013.

Side Eyeing Chloe is a picture of young Chloe Clem looking disapprovingly at her mother. It shows her taking a surprise trip with her mom to Disneyland.

Jack Dorsey, Twitter's founder, has promoted an NFT for the first tweet. Bids reached $2.5 million.

HMRC stated that the fraud suspects were accused of using "sophisticated techniques" to conceal their identities. This included false and stolen addresses, prepaid unregistered mobile phone numbers, Virtual Private Networks, false invoices, and pretending to be engaged in legitimate business activities.

Nick Sharp, deputy director of economic crime, stated that the first seizure a NFT "serves to warn anyone who believes they can use crypto assets for money laundering from HMRC."

"We adapt to new technology constantly to ensure that we keep up with criminals' and evaders' efforts to hide their assets."

HMRC claimed it had obtained a court order to hold the seized crypto assets valued at around PS5,000 and three NFTs of digital artwork, which were not valued while its investigation continues.


 

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