Kraken helps UK police fight IOTA scam for £2m (GBP)

As part of “Operation Hyphen”, the Kraken exchange has helped a UK police unit convert 2 million stolen Streling pounds (GBP) into crypto. The converted funds will be returned to the victims of the IOTA crypto scam.

Kraken to the rescue of the British police

Regularly combated by state financial regulators, crypto exchanges can be allies of the authorities in the fight against crime in the ecosystem. The UK provides us with yet another example today. Indeed, as part of “Operation Hyphen”, one of the world’s largest crypto CEXs (Centralized Exchange), Kraken helped the British South East Regional Organized Crime Unit (SEROCU) to convert the stolen funds into pounds sterling (GBP).

In total, almost 2 million pounds sterling (GBP) were converted during this operation. These funds will be returned to the victims, says Rob Bryantthe inspector in charge of the investigation. This SEROCU agent added that this restitution would never have been possible without the contribution of the exchange. Kraken which converted the assets.

The many victims around the world have been waiting patiently for five years for this to happen, and it’s thanks to the innovation and collaboration of my team, in particular with Kraken, without whom this might not have been possible.

Rob Bryant, British police inspector.

The exchange Kraken has made no secret of its satisfaction at having contributed to the happy ending of this 2018 case. Lana Sinelnikova UK Compliance Manager at Kraken was pleased to have facilitated a transaction that enabled victims to be compensated. This testifies to the importance attached by Kraken to act in accordance with AML (Anti-Money Laundering) standards, and KYC (Know Your Customer), she adds.

IOTA, the crypto scam controlled by Wybo Wiersma

The case concluded today by SEROCU dates back 5 years ago. In 2018, Wybo Wiersma a 40-year-old man based in the Netherlands, created a fraudulent site enabling him to take control of IOTA tokens without the owners’ knowledge. All users who logged on to the fraudulent site saw their tokens pass under the control of Wybo. The stolen assets were then sent to numerous cryptocurrency trading accounts.

Alerted, the South East Regional Organised Crime Unit took up the case. Under the Proceeds of Crime Act, SEROCU seized approximately £2.37 million worth of cryptocurrencies. January 27, 2023, Wybo Wiersma was sentenced to four and a half years in prison for theft. The judge also ordered the thief to return the funds of the victims identified by the police. This restitution was covered by funds previously seized by SEROCU, which converted them into Sterling (GBP) via Kraken.

The United Kingdom is a particularly harsh and critical country towards the crypto industry. Restrictions are commonly imposed on British users of trading platforms such as Binance.
The Wybo Wiersma case shows that crypto exchanges aren’t as bad as they’re made out to be. Cooperation between the police and crypto companies enabled victims of a scam to get their money back. So, instead of blindly attacking CEXs, state authorities could make them allies in the fight against the illegal use of cryptocurrency.