The U.S. mob was initially brought down using tax laws. Now the UK tax authority has seized three Non-Fungible Tokens (NFT) platforms and arrested three people for tax evasion, but it will grow from there – they have everybody recorded on the blockchain!
I recognize that the concept of NFTs is credible and could deliver value, but most of the current NFT platforms lack the ability to test provenance or identity, and so many submissions are performed by criminals. The lack of identity verification creates multiple threat vectors including money laundering and washing, the process of placing bids on one’s own work to increase its value. The BBC states that this is a “bubble waiting to burst” but really, it’s “crimes waiting to be discovered”:
“The UK tax authority has seized three Non-Fungible Tokens (NFT) as part of a probe into a suspected a VAT fraud involving 250 alleged fake companies.
HM Revenue and Customs (HMRC) said three people had been arrested on suspicion of attempting to defraud it of £1.4m.
The authority said it was the first UK law enforcement to seize an NFT.
NFTs are assets in the digital world that can be bought and sold, but which have no tangible form of their own.
The digital tokens, which emerged in 2014, can be thought of as certificates of ownership for virtual or physical assets. NFTs have a unique digital signature so they can be bought and sold using traditional currency or crypto currency, such as Bitcoin.
Where Bitcoin has been hailed as a digital answer to currency, NFTs have been touted as the digital answer to collectables, but plenty of sceptics fear they’re a bubble waiting to burst.”
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group