Gang of Bitcoin scammers made £21m from crypto loophole
FOUR scammers who exploited a loophole in the Coinspot cryptocurrency platform face prison after dishonestly acquiring £21m in Bitcoins and other digital tokens.
In a fraud masterminded by a Blackpool council tenant living off disability benefits who spotted the loophole by chance, the four spent vast sums of cash buying houses, cars and luxury watches, living in hotels and even paying off friends’ mortgages, Preston Crown Court was told.
The council tenant, James Parker, died in 2021 before he could be brought to trial. He had been exploiting a glitch in the website of Australia-based Coinspot, a cryptocurrency exchange.
During a four-month spree in winter 2017, Parker used the glitch to acquire nearly 2,500 Bitcoins, enlisting a group of friends to help him launder them away from Coinspot’s reach.
At the time, the price of Bitcoin was between £7,000 and £8,000, the jury was told. The glitch came about when Coinspot customers bought and sold cryptocurrencies simultaneously.
For example, if someone bought and sold five Bitcoins at the same time, Coinspot’s systems failed to subtract the purchase value from their account, meaning they ended up with 10 Bitcoins.
Once he found it, Parker kept the glitch to himself and doubled his money with every transaction he made.
Parker’s pension adviser Stephen Boys, 54, assisted with laundering Parker’s Bitcoins into a property company the two set up together. In return Parker paid off Boys’ mortgage.
The fraud’s mastermind was also helped by his carer, James Austin-beddoes, 27, and Jordan Robinson, a 23-year-old barman. He worked at the hotel in Fleetwood, where Parker began living during his Bitcoin spree. Robinson’s girlfriend’s, Kelly Caton, 44, from Blackpool, was also part of the ring. Three were found guilty of conspiracy to defraud, acquiring and concealing criminal property. Boys was convicted of transferring criminal property.
Jonathan Kelleher, of the Crown Prosecution Service, said: “Cyberenabled crime presents an increasing threat to international economic stability, as well as to honest individual investors in cryptocurrency.”