Her Majesty's Revenue and Customs, the United Kingdom's main tax department, took into possession three non-fungible tokens (NFTs) for the first time ever in an investigation corralling nearly 250 fake companies amidst a value-added tax (VAT) scheme. 

The UK NFT seizure has already allowed officials to capture three suspects involved in the tax fraud, which was estimated at around £1.4 million, or nearly $1.9 million in defrauded funds. Those involved in the NFT tax scheme were allegedly attempting to drive up the VAT more than what they were realistically owed. 

A value-added tax is essentially a sales tax for specific purchases. The suspects were utilizing various false invoices, unregistered phones, and stolen identities in order to remain anonymous in their VAT fraud. 

HMRC's own deputy director of economic crime, Nick Sharp, relayed in a statement that the HMRC NFT seizure "serves as a warning to anyone who thinks they can use crypto assets to hide money from HMRC." 

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NFTs and cryptocurrency have both steadily been on the rise in various forms and industries. NFTs themselves, which first debuted back in 2014, have become home to myriad fraudulent scams, specifically money laundering and wash trading, as the crypto tokens are essentially intangible codes available anonymously on a blockchain network. The NFT market was worth nearly $340 million in 2020 and is on track to reach up to $3 billion by 2030. 

The three seized NFT digital art assets in the HMRC investigation have yet to be determined price-wise, yet other assorted cryptocurrency assets were managed to be acquired, all of which amounted to around £5,000. HMRC was granted a court order to acquire said assets amidst its investigation. 

Sharp went on to state, "We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets." 

Jake Moore, among advisers at the cybersecurity firm ESET, relayed that the HMRC NFT seizure is a major turning point in how cybercrime itself can be viewed on the outside looking in. More investigations and swift arrests will not only slow but diminish the potential of said crimes taking place.

Moore tells The Guardian: "A key element of cryptocurrencies' design is to keep them secure and protected against interception by anyone, whether that be a threat actor or law enforcement. But with a fast-moving digital world where mistakes can be made, police forces are beginning to buck the trend in how they investigate digital crime, locate evidence and finally seize digital assets." 

In other words, HMRC is with its very first NFT seizure proving that cybercrime can and will still be prosecuted at its fullest degree. With the world now turning toward decentralized exchanges and crypto assets, worldwide officials and organizations will have to likewise grow smarter and saavier in their attempts to thwart cybercrimes.

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