British tax regulator — HM Revenue and Customs (HMRC) — has seized three non-fungible tokens (NFT) as part of a $1.9 million fraud case, The Telegraph reports. The seizure — according to HMRC — was the first law enforcement action in the UK involving the market of digital art.

Besides the tokens themselves, three people were also arrested in the alleged VAT repayment fraud. Nick Sharp, Deputy Director in HMRC's Fraud Investigation Service, said the seizure "serves as a warning to anyone who thinks they can use crypto assets to hide money from HMRC." The regulator didn't elaborate though what NFTs and more importantly from where had been seized.

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HMRC also added without naming the suspects that they used "sophisticated methods to try to hide their identities including false and stolen identities."

As To The Moon earlier reported, the level of scam and fraud in the NFT market reached a new milestone as the area even got its own brand-new blockchain-based services that are hoped to help in the fight against the Achilles heel of digital collectibles.