Nearly 2 million of stolen cryptocurrency to be paid back to victims South East Regional Organised Crime Unit

pAround 19 million worth of stolen cryptocurrency is to be paid back to victims of theft as a result of work by the South East Regional Organised Crime Unit SEROCUppOn 27 January this year 40yearold Wybo Wiersma of Het Weike Goredijk the Netherlands was jailed for four and a half years for theftppIn January 2018 he transferred IOTA tokens to himself without the consent of the ownersppIOTA cryptocurrency requires users to have an 81 character seed made up of capital letters and the number 9 to control their tokensppAll of the victims had used the website iotaseedio a fraudulent site created by Wiersma to generate what they believed to be a random seed However these seed phrases were predetermined by Wiersma enabling him to take control of the tokensppThe tokens were then transferred to numerous cryptocurrency trading accountsppUnder the Proceeds of Crime Act SEROCU seized around 237million in cryptocurrency from a cryptocurrency exchange This was the first time in the country that this legislation was used to make a seizure from an exchangeppAt court Wiersma was ordered to pay 21million some of which was paid from the seized cryptocurrency The rest was ordered to be returned to the victims So far between 50 and 60 victims have been identified worldwideppIn order to return the currency to the victims SEROCU had to overcome significant challenges in being able to convert the cryptocurrency to Sterling GBPppTo ensure this was done lawfully and in line with national policy officers worked with the Financial Conduct Authority FCA the National Police Chiefs Council NPCC and Kraken Digital Asset Exchange an FCA registered cryptoasset exchangeppKraken provided significant expertise and support that enabled SEROCU to convert the stolen cryptoassets into GBP so they could be returned to victims Kraken also liaised with the FCA to ensure the processing of stolen assets was done lawfully consistent with Krakens FCA registrationppDetective Inspector Rob Bryant of SEROCUs Cyber Crime and Cryptocurrency Unit said This has been a complex and challenging investigation which SEROCU took ownership of in late 2018 from our Law Enforcement colleagues in GermanyppThroughout the course of this investigation we have had to innovate to overcome the complexities of cryptocurrencyppAs the senior investigating officer I am incredibly grateful for the support and guidance that I have received from a broad range of partners I knew that the complexities would not end once Mr Wiersma had been convicted of theft and we have had a great challenge in establishing a way to return the stolen funds to the victims of this crime ppThe victims of which there are many across the world have patiently waited for five years for this to happen and it is thanks to my teams innovation and collaboration particularly with Kraken without whom this may not have been possible ppI am delighted that we are finally able to return the stolen funds and we can bring closure to the victimsppAssistant Chief Constable Tim Metcalfe National Police Chiefs Council Lead for Cryptocurrency said Policing is dedicated in ensuring we use the full extent of the law and our relationships with industry leaders to bring back what has been stolen so that the victims are delivered justiceppThis particular case is one of innovation and collaboration between the police and private sector which has resulted in victims finally being able to get their money backppLana Sinelnikova UK Head of Compliance at Kraken said As a crypto provider that takes its security protocols and compliance measures seriously were pleased SEROCU and the NPCC engaged Kraken to facilitate a transaction that enabled these victims to be compensated This is testament to the emphasis Kraken places on acting in accordance with the highest AML and KYC standardsppScammers always find new ways to exploit their victims and will continue to use these tactics until they prove unsuccessful In recent years some have relied on the excitement of crypto to deploy commonly used social engineering tactics such as we saw hereppFor crypto to reach mass adoption more people need to have confidence in the technology and players within the ecosystem For that reason we urge those who plan to participate in crypto to educate themselves about the ecosystem including common red flags that scammers use so they can avoid falling victim to similar crimesppMatthew Barber Police Crime Commissioner for Thames Valley said I am delighted to see the outstanding work of the SEROCU in seizing and returning highvalued cryptocurrency from the hands of scammersppAs the first operation of its kind in this country Op Hyphen has ensured that fraud victims from across the world will see the return of nearly 2m of cryptocurrencyppScammers will continue to seek new and innovative ways to exploit victims This operation demonstrates that the SEROCU will continue to be innovative in order to disrupt organised crime groups and keeping our communities safe    p