HMRC seizes NFTs for first time amid fraud inquiry

The UK tax department has seized three non-fungible tokens (NFTs) as part of an investigation into a suspected VAT fraud scheme involving 250 fake companies.

HM Revenue and Customs said on Monday it had seized the NFTs and arrested three people on suspicion of attempting to defraud it out of £1.4m. It is the first time a UK law enforcement agency has seized an NFT.

NFTs are unique digital tokens that first appeared in 2014 and can be bought and sold in crypto or traditional currencies but which have no tangible form of their own.

HMRC said it had secured a court order to seize the three digital artwork NFTs, which have not yet been valued, and other crypto assets worth about £5,000.

Jake Moore, an adviser at the cybersecurity firm ESET, said the seizure showed the police are fast adapting to the threat of cybercrime and how to seize digital assets that are designed to avoid law enforcement.