UK police are set to return nearly £2 million ($2.45 million) to victims of a crypto scam, following a first-of-its-kind seizure from an exchange in the country.
At the start of the year, the South East Regional Organised Crime Unit (SEROCU) was able to confiscate around £2.37 million ($2.9 million) in crypto from the wallet of Wybo Wiersma.
The now-40-year-old Dutchman had set up a fake IOTA website and conned at least 50 victims worldwide into buying crypto via iotaseed.io. In January 2018, Wiersma transferred the tokens to himself before forwarding them to several other crypto wallets.
He did this by generating predetermined seed phrases that, once adopted by users, allowed him to access their wallets. Wiersma could then dip into the wallets and take out stored crypto whenever he wanted.
Wiersma was arrested in 2019 and in January this year was sentenced to four and a half years in jail. This is the first time that police in the UK have used legislation from the Proceeds of Crime Act to seize stolen funds from a crypto exchange.
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As published in the SEROCU report, the Thames Valley police and crime commissioner said, “As the first operation of its kind in this country, Operation Hyphen has ensured that fraud victims from across the world will see the return of nearly £2m of cryptocurrency.”
Kraken helped with police crypto seizure
Police described the investigation as “complex and challenging” with the department having to “overcome significant challenges” in order to convert the stolen crypto. Because of this, SEROCU required help from the Kraken crypto exchange, the Financial Conduct Authority (FCA), and the National Police Chief’s Council.
Kraken reportedly worked alongside the FCA to help authorities convert the stolen crypto into GBP and ensure the whole process was carried out legally.
SEROCU’s Detective Inspector Rob Bryant in charge of the Cyber Crime and Cryptocurrency Unit, said, “The victims… have patiently waited for five years for this to happen and it is thanks to my team’s innovation and collaboration, particularly with Kraken, without whom this may not have been possible.”