UK authorities seize NFTs for first time in £1.4 million tax fraud case

British authorities seized non-fungible tokens connected to a tax probe in what’s believed to be the first seizure of its kind for the United Kingdom.

Officials at Her Majesty’s Revenues and Customs said they seized three digital art NFTs and £5,000 in crypto assets as part of an investigation into a £1.4 million ($1.9 million) tax fraud case. Britain’s tax watchdog said it’s the first U.K. law enforcement agency to seize NFTs, which have not yet been appraised.

Authorities have arrested three people accused of defrauding the agency by claiming more sales tax reimbursement than they were owed in the form of Value Added Tax (VAT) repayment. HMRC said the heist involved 250 alleged fake companies, stolen and fake identities and fake invoices.

“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,” Deputy Director of Economic Crime Nick Sharp said in a statement.

The news comes about a week after the U.S. seized $3.6 billion in Bitcoin, allegedly stolen in a 2016 hack of Bitfinex. The Justice Department arrested a New York couple in that case, Ilya Lichtenstein and Heather Morgan. Like in the U.K., the agency response in this seizure was similar.

“Federal law enforcement demonstrates once again that we can follow money through the blockchain, and that we will not allow cryptocurrency to be a safe haven for money laundering or a zone of lawlessness within our financial system,” Assistant Attorney General Kenneth Polite Jr. said in a statement.