Police Investigating Online Fraud Seize £12m of Crypto From Teen

A 17-year-old boy who set up a fake website as part of a cyber fraud has had cryptocurrency worth more than £2 million taken from him by police.

The boy used his website to trick users of a digital gift voucher site into entering their personal details. He stole £6,500 worth of vouchers and used the proceeds to buy Bitcoin.

At Lincoln Crown Court, the teenager was given a 12-month rehabilitation order.

The court heard that he had created the fake website in his bedroom in April 2020. The site was almost identical to the official site of gift voucher-selling site Love2Shop. He paid for online advertising that ensured his fake site appeared above the real Love2Shop site when people made internet searches. People thought they were using the legitimate website.

The boy took down his bogus site after a week, as Love2Shop began investigating following a complaint from a customer. 

He used the proceeds from his criminal activity to buy Bitcoin and other cryptocurrency, which then rapidly rose in value. At the time of his arrest in August 2020, his cryptocurrency was worth £200,000 but it is now valued at over £2 million

The boy, who is an A-level student, admitted charges of money laundering and fraud by false representation. The judge that he benefited from his crimes by £2,141,720 and ordered that amount to be confiscated from his assets.

It can be seen as a positive that law enforcement took action in this case. It is also good to see that the authorities seized the bitcoin and not the “value” – a mistake that other countries have made. To take one example, Swedish authorities were forced to pay a jailed drug dealer $1.5m in bitcoin, after his illegally obtained cryptocurrency rose in value while he was in custody. The prosecutor in Sweden used the fiat value of the coin to make the initial case against the defendant, with the cryptocurrency seized being worth $100,000.00 at the time. But two years after the conviction  the price of bitcoin had soared and the crypto had appreciated in value to $1.5m, which the authorities had to hand back to him.