British tax authorities said on Monday they had made their first seizure of non-fungible tokens (NFTs) in a crackdown on suspected criminal activity to hide money.
Her Majesty's Revenue & Customs seized three NFTs after investigating an attempt to defraud the public coffers of 1.4 million British pounds ($1.9 million).
Around 5,000 British pounds worth of other crypto assets were also seized.
The probe also led to the arrest of three people for alleged value added tax repayment fraud involving 250 fake companies.
Nick Sharp, deputy director economic crime at HMRC, said the seizures of the NFTs, which had not yet been valued, served as a warning to anyone who thought they could use crypto 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.
NFTs are a form of crypto asset that uses blockchain to record the ownership status of digital files such as images, videos and even items within online games.