Her Majesty’s Revenue and Customs has not taken control of the three NFTs, but is instead preventing them from being sold via court order, according to Sky News
Three people have been arrested on suspicion of attempting to defraud the UK authority

The United Kingdom’s tax enforcement agency seized three NFTs (non-fungible tokens) in a $1.9 million fraud probe — the country’s first confiscation of a digital collectible.

Three people have been arrested on suspicion of fraud stemming from Her Majesty’s Revenue and Customs’ (HRMC) investigation. Their names were not disclosed.

Nick Sharp, HMRC’s deputy director of economic crime, told BBC Monday that the authority is “constantly adapting to new technology to ensure [they] keep pace with how criminals and evaders look to conceal their assets.”

The probe, Sharp said, “serves as a warning to anyone who thinks they can use crypto assets to hide money from HMRC.” The agency, however, has not taken custody of the NFTs and is instead preventing them from being sold via court order, according to Sky News.

The suspected organized and value added tax (VAT) fraud involves 250 alleged fake companies. Suspects used fake addresses, virtual private networks (VPNs), unregistered phones and stolen identities to try to hide illicit activities from the agency.

The news follows another high-profile government seizure. Last week, the US Department of Justice (DOJ) recouped more than $3.6 billion worth of cryptocurrency connected with the 2016 Bitfinex hack.

“Financial crime strikes at the core of our national and economic security,” Acting Executive Associate Director Steve Francis of Homeland Security Investigations said in a statement.

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Her Majesty's Revenue and Customs