Former Oxford Student Jailed for $2.6 Million IOTA Crypto Scam

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  • A former Oxford University student has been jailed for four and a half years for a 2017 scam involving IOTA wallets
  • Wybo Wiersma ran an IOTA wallet generating website which kept the keys, allowing him to steal the funds
  • Wiersma made £2 million from the scam, but was arrested in the Netherlands in 2020

A former student at the prestigious Oxford University has been jailed for four and a half years for a crypto scam involving the IOTA network back in 2017. Wybo Wiersma, a PhD student from the Netherlands, established a website named while studying at the Internet Institute of St Cross College. He used a false identity to create the site, which generated passwords “seeds” for IOTA wallets and retained the seeds so he could empty the funds, which he then laundered.

Bitfinex and Binance Froze Accounts

Wiersma was caught when Bitfinex, the site he was using to convert his stolen MIOTA tokens into Monero, got suspicious of the deposit pattern in January 2018 and demanded he provide identification. He submitted fake passports, one from Belgium with an incorrect national outline, and another of a man named “Jason” holding an Australian passport, both of which were proven to be fake. As his Bitfinex accounts remained frozen, Wiersma moved to Binance and created five more accounts, which were also frozen. He then submitted a photo of a man holding a fake British passport as identification.

By 2018, victims of the site had reported stolen funds to German police, who traced the crime to the UK and handed the case over to the South East Regional Organized Crime Unit’s cybercrime unit. They traced the crime back to Wiersma after discovering he used the same VPN to access his Bitfinex account, leading to the identification of the other four accounts that received stolen funds.

UK Police Continued Investigation After Release

In January 2019, British police raided Wiersma’s home in Oxford, by which time he had dropped out of his PhD studies. They found his desktop computer open and were able to track his activities, with Wiersma blaming the activity on hackers. He was eventually released without charges and returned to the Netherlands.

However, the investigation into his activities continued, and detectives discovered that the alias “Norbert van den Berg,” used to establish the original harmful website, was present in Wiersma’s university coursework and were able to link his VPN to a bitcoin payment used to create his fraudulent website.

Despite being unable to access other electronics seized in the raid, such as a laptop, six hard drives, two USB sticks, and a memory card, prosecutors still had enough evidence to charge Wiersma. He was finally arrested on Christmas Eve 2020 in the Netherlands and was convicted last week, with the judge saying that his “greed and dishonesty” were behind his actions.