The non-fungible token market is full of shady dealings, and British authorities hope to clean them up. BBC News reports HM Revenue and Customs has seized three NFTs as part of investigation into potential tax fraud. The suspects allegedly used 250 fake companies, false identities, prepaid phones, VPNs and other techniques to hide themselves as they sought to defraud the UK tax office of £1.4 million (nearly $1.9 million).
HMRC obtained a court order to take the unvalued NFTs as well as crypto assets worth roughly £5,000 ($6,760). This is the first time UK law enforcement has seized NFTs, the authority said.
The investigation is still ongoing. However, economic crime deputy director Nick Sharp believed the seizures would “serve as a warning” to other would-be crypto fraud perpetrators.
The lack of regulations and other protections around NFTs has led to significant problems with fraud and scams, including self-sales to boost prices (aka wash trading) and fake or plagiarized tokens. Cent recently halted most transactions due to “rampant” sales of bogus tokens, while marketplace giant OpenSea has been scrambling to develop safeguards after 80 percent of NFTs minted through a free tool were discovered to be fakes, copies or spam. Don’t be surprised if there are more seizures like this one, at least until NFT marketplace owners have more ways to discourage fraud and other harmful activities.
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