The Daily Telegraph has reported that the tax authority is investigating a rising number of tax fraud and tax evasion cases where the use of crypto assets is known or suspected.

HMRC staff have been trained to use specialised tools and obtain data to help investigations involving crypto assets with a dedicated team focused on using technology to identify and disrupt fraudsters.

HMRC has established a special technology-focused team in an attempt to tackle the threat from crypto-crime after seeing a jump in money laundering aided by digital currencies.

The news comes after The Telegraph reported that HMRC seized non-fungible tokens (NFTs) for the first time amid fears the surge in the digital art market will help criminals to hide money.

Experts have said that crypto investors are exposed to tighter regulation by HMRC with many not understanding the tax implications as they make big gains on the volatile assets.

Sir Edward Troup, former executive chair at HMRC, said the technological advances in economic crime are “probably a bit bigger than anything we’ve seen in my lifetime”.

He added: “Technology in the market is always going to try and get away from the authorities in one way or another. The bad guys are always looking for ways of staying away from authorities.”

HMRC said its action to seize three digital artwork NFTs is a “warning to anyone who thinks they can use crypto assets to hide money from HMRC”. Three people were arrested as part of the investigation into an attempt to defraud the taxpayer of £1.4m.