UK tax authorities seize NFTs in fraud probe. Photo London sells 25 per cent stake; dealer launches ivory rescue scheme; is it all over for OVRs?
Angela Heisch, ‘Dew at Dusk’ (2022) © Thomas Müller
HM Revenue & Customs, the UK tax department, revealed its first seizure of three NFT-backed works this week, bringing the evil side of the non-fungible token art business into focus. HMRC said three people were arrested as part of a larger investigation into a potential £1.4 million tax scam involving 250 fictitious firms. According to Nick Sharp, HMRC’s deputy director of economic crime, the confiscation “serves as a message to anyone who thinks they can use crypto assets to hide money from HMRC.”
The US Treasury released a research earlier this month on how the art trade facilitates money laundering and terror financing. This study discovered that NFTs might be used for “self-laundering,” in which criminals “transact with themselves to fabricate sales records on the blockchain.” We don’t yet know how the NFTs were utilized in the HMRC probe, according to Bernadine Bröcker Wieder, co-founder of art-tech platform Vastari, but “there are tons of scams happening on and tax is the first approach to capture crooks.” “NFTs, on the other hand, are the worst environment to conduct a crime,” she explains. I don’t think they’ll last as a place to hide wealth since it’s impossible to keep your identity hidden for long.”
Read more: ft.com (article might be gated)