HM Revenue and Customs (HMRC), the chief tax authority in the United Kingdom, has seized three NFTs as part of an investigation into VAT fraud.

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First reported by the Telegraph, HMRC recently seized three NFTs along with £5,000 in other crypto assets and arrested three people suspected of attempting to defraud the taxman. The suspects reportedly used stolen IDs and created 250 alleged fake companies to evade paying £1.4 million in value-added taxes (VAT).

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Nick Sharp, deputy director economic crime at HMRC, said the seized NFTs, which have yet to be valued, serve as a warning to anyone planning on using digital assets to hide money. “We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets,” he said in a statement.

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While it’s no surprise NFTs are being used for financial crimes, earlier this month, blockchain analysis firm Chainalysis explained that in Q4 of 2021, illicit wallets sent just $1.4 million to NFT marketplaces. In comparison to the $8.6 billion laundered through cryptocurrency throughout the year.

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