Four years in prison for large-scale cryptocurrency fraud | news

News feature | 11-01-2022 | 15:38

A 40-year-old man from Deventer was today sentenced to four years in prison in a court in Zwolle. According to the public prosecutor, the suspect is guilty of large-scale virtual currency fraud, better known as cryptocurrency. A five-year business ban is also required. According to the public prosecutor, the suspect would no longer be allowed to act as a wealth manager and dealer of financial products, including cryptocurrencies, during that period.

The Deventer also had to repay more than 937,000 euros to the state because he earned them by committing criminal acts. “Making your own cryptocurrencies and trading with them is not a criminal offense. But in this case, it was about fraud, manipulating the market, giving false information about cryptocurrencies and withholding and concealing important information,” the lawyer said.

On Monday 20 April 2020, the police raided a warehouse on Groningerstraat in Deventer and seized a laptop. From chats that were found, it appeared that Deventeren was the administrator and owner of, among other things, the trading site, a platform where people could create an account, create their own ‘wallet’ (a wallet). , and money could go there to convert it into all kinds of cryptocurrencies.

Chat messages from January 2018 show that had almost 20,000 members pretty soon after launch. It also turned out that from the beginning it was intended to flatten at some point. In early April 2018, the withdrawal feature (‘withdrawal’) of their wallets was shut down for customers. Account holders’ wallets were emptied by suspects while continued to run.

Pump and dump

In addition, according to the public prosecutor, the ‘pump and dump’ method was used in this case. There was a lot of publicity for the coins that the suspect himself had made, with names like Tulipmaniacoin, Malc, ERSO, Europe United and Paris. The suspect offered his coins for sale at trading venues and then bought them himself, causing the price to rise artificially; the pumping. Then the coins were sold at the top; dump it. “The suspect has benefited from market forces and the development of the cryptocurrency. And he has made a lot of money from it. It is not in itself a criminal offense. Making money is allowed, making a lot of money is also allowed. But when these huge earnings come “From false tricks, withholding essential information and deliberately spreading false information, this is fraud. It’s punishable, and that’s exactly what it’s about today,” the public prosecutor said. “The suspect acted with the aim of obtaining financial advantage through criminal action at the expense of the victims.”

QR scams

In March 2021, Triodos bank reported, among other things, fraud and computer hacking. Since December 2020, the bank’s customers have been subjected to several attacks by a ‘social engineer’ who, on behalf of Triodos, used a false name and capacity to contact customers by telephone. Customers were persuaded to scan a QR code sent to them via email. Customers were not aware that these QR codes were ready iDEAL payments to crypto trading sites. The suspect converted the money obtained through this ‘bank helpdesk scam’ into cryptocurrency.

The man was also charged with money laundering; he bought a house, a boat, various expensive cars and jewelry with the money that, according to the prosecution, comes from the cryptocurrency scam. Because this was going on for a long time, it was charged as usual money laundering for a total amount of 1.8 million euros. In addition, the suspect owned a bitcoin ATM in Deventer, which according to the prosecution was also used to launder money.

“The suspect was not aware of the financial damage, but acted solely for his own financial gain,” the public prosecutor said in the appeal. As for the officer, there is no reason to deviate from the guidelines and moderate the verdict: “The suspect did not want to cooperate in unlocking his devices and has largely invoked his right to secrecy.”

All things considered, the Attorney General finds a four-year prison sentence appropriate and appropriate.

During the arrests in May 2021, a then 22-year-old man from Apeldoorn and a 41-year-old man from Zaandam were also arrested. The prosecution will at a later date decide on a possible further prosecution of these suspects.

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