The UK tax authority has seized control of three non-fungible tokens (NFTs) for the first time as part of a suspected NZ$2.86 million fraud enquiry.
Her Majesty's Revenue and Customs (HMRC) said it was the first law enforcement agency in the UK to claim digital assets like this.
Three people were also arrested as part of the suspected criminal activity to hide money.
HMRC's deputy director economic crime, Nick Sharp, said the NFT seizure was a "a warning to anyone who thinks they can use crypto assets to hide money from HMRC".
"We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets."
The probe involved up to 250 fake companies, with the agency saying "sophisticated methods" were used to hide information and identities.
This included burner phones, Virtual Private Networks (VPNs), fake addresses and false and stolen identities.
Another $10,000 worth of digital assets were also seized by HMRC. The value of the NFTs is yet to be determined.
According to Sky News, HMRC is using a court order to prevent them being sold.
Cybersecurity adviser Jake Moore told The Guardian that seizing the NFTs showed law enforcement agencies were adapting to the threat of cybercrime.
"A key element of cryptocurrencies' design is to keep them secure and protected against interception by anyone, whether that be a threat actor or law enforcement," he told the newspaper.
"But with a fast-moving digital world where mistakes can be made, police forces are beginning to buck the trend in how they investigate digital crime, locate evidence and finally seize digital assets."
The UK's Proceeds of Crime Act can also reward such seizures, Moore said. That allows the investigating force to keep half of the forfeited goods.
According to Reuters, the sale of NFTs was worth around US$25 billion (NZ$37.6 billion) in 2021.
