Shearman Bowen and Co. recently acted on behalf of a client who was sentenced for his role in a multimillion cryptocurrency fraud at Bristol Crown Court.
Operation Jigsaw investigated a crypto currency fraud affecting thousands of cryptocurrency wallets held at Blockchain.com. More than £5m is known to have been lost by victims but the wider fraud is thought to have run into the tens and millions.
The method of the fraud was to induce the victims to try and access their account through spoofed websites. As they did so, their information would simultaneously be inputted into the genuine website, from which, as victims would later discover, wallet balances were depleted. Extended private and public keys of the wallets, as well as recovery seeds, would be harvested at the same time allowing the fraudsters to access the wallets in the future.
Methods were deployed to monitor compromised wallets so that, should victims replenish their wallets, fraudsters would be alerted, and wallets would be depleted again using the harvested keys.
To increase the chances of victims using the spoofed websites, fraudsters used sophisticated methods to promote their websites above other internet search results.
An international investigation conducted by Bristol Police found that over 17,000 cryptocurrency wallets were compromised, with victims defrauded from at least 26 countries. Fraudulent transactions were identified from input (or sending) address cluster analysis, and by linking destination addresses to defendants. The investigation, which was unusually complex, lasted several years and involved detailed analysis by relevant prosecution and defence experts.
Following close analysis of the evidence we were able to demonstrate that our client’s involvement was at a lower level than alleged by the Crown. As a result, he received a reduced sentence of 4 years.
A key element of our strategy involved negotiating and agreeing a confiscation order before our client was sentenced. It is unusual to complete confiscation proceedings before a defendant has been sentenced but by doing so, we were able to present his mitigation in the best light. The court recognised the substantial efforts made by him to address the financial repercussions of the fraud, which assisted in a reduced sentence being imposed.
This case further underscores our firm’s capability to handle complex legal cases of this type with precision and care.
Click here for a media report on the case.
Mark Bowen was the lead lawyer on this case with Will Martin of 2 Hare Court instructed by the firm to act as Counsel.
For more information on the case or the work we undertake in our business crime and fraud department please contact us on 020 7025 4450 or email us at info@shearmanbowen.co.uk