HM Revenue and Customs, the equivalent of the IRS in the United Kingdom, announced earlier this week that it had seized three NFTs and about $6,800 worth of crypto from three individuals who are currently embroiled in a $1.9 million tax fraud case, reported the BBC.
Though crypto and NFTs have been touted in popular culture as an easy way to hide assets from tax agencies, every transaction is recorded, and this makes it easy to track nefarious transactions. The unnamed suspects seem to have known this. The HMRC said they used a variety of methods to conceal their assets, including false invoices, false identities, VPNs, and 250 fake companies. Despite their efforts, the suspects were caught.
This is the first time NFTs have been seized by a U.K. law enforcement agency. The seizure was done via a court order. Nick Sharp, HMRC’s deputy director of economic crime, told the BBC, “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.”
The U.K. and the U.S. have been making concerted efforts recently to remind their citizens that their crypto assets are taxable. The HMRC has even begun sending “nudge” letters to known crypto holders that their assets are taxable. The letters are meant to be educational, as many people have been led to believe that this novel currency somehow circumvents the state. As the tax season proceeds in the US, organizations as disparate as Sotheby’s and TurboTax are constantly reminding their clients that they must claim their crypto or NFTs.