The Dutchman will serve four and a half years in prison after defrauding investors of more than $2.6 million.

Wybo Wiersma — a 40-year-old Dutchman who studied at St. Cross College in Oxford — will be sentenced to 54 months in prison for using a cryptocurrency scheme to steal £2,156,000 (more than $2.6 million).

British detectives have linked the scam to a man who used the pseudonym Norbert van den Berg on his malicious website and university courses.

'Greed and dishonesty' behind the scam

Judge Michael Gledhill KC ordered Wiersma to jail for four and a half years for the crime, which began while he was a student at St Cross College Internet Institute.

Using a pseudonym, he set up a website that generated “seeds” (passwords that users believed had not been compromised) that they had to use to mine MIOTA, a cryptocurrency with a current market cap of more than $620 million.

However, the “seed” was attached with malicious code that gave Wiersma access to customers’ assets, and he began stealing funds and transferring them into his accounts. The criminals then used Bitfinex to convert the stolen MIOTA stash into Monero (XMR) in January 2018.

The platform intercepted his suspicious activity and froze his account, asking for proof of identity. Wiersma provided fake passports — one for a Belgian resident and another for an Australian named “Jason.”

Bitfinex did not authorize the documents, which prompted the Dutchman to use the services of Binance. The world's leading cryptocurrency exchange soon discovered his plan and suspended his access to the account.

Some of the affected investors reported their missing assets to German police in 2018, who worked with their British colleagues and launched an investigation that ultimately led them to Wiersma’s home in Oxford.

British law enforcement officers raided the site, saw his desktop computer was turned on, and tracked his activities over the past few years. When asked about the site, he did not provide information and briefly returned to the Netherlands.

Nevertheless, detectives continued to investigate the case and discovered that he used the pseudonym Norbert van den Berg on seed generation websites and in his university courses. They also linked the nickname to Bitcoin payments.

Authorities arrested him in the Netherlands on Christmas Eve 2020 and sentenced him two years later. In announcing the sentence, Judge Gledhill said:

"You are an expert in IT and computer science... The fact that you decided to misuse your skills to steal is dishonesty of the highest order. Why did you commit these crimes? Greed and dishonesty are two words that come to mind easily."

UK's Encryption Plans

This type of fraud has been extremely popular in the UK over the past few years, and the market downturn in 2022 has not stopped the activities of bad actors. In fact, from October 2021 to September 2022, crypto scams increased by a third.

David Lindberg, CEO of NatWest Retail Banking, has previously warned investors that the UK is a "paradise" for fraudsters. He urged the UK government, police, banks and social media operators to work together to tackle the problem:

"Fraud and scams are an industry. They are smart, they move fast and it is heartbreaking to see how they try to destroy lives."