Man who set up pump and dumps and fake crypto markets gets 4 years in prison
A 40-year-old man from Veenhuizen has been sentenced to four years in prison for defrauding people by setting up a fake cryptocurrency marketplace. He then promoted coins and made them look like they were worth a lot more than they were, then dumped them.
The man set up his own crypto market on which customers could store and trade cryptocurrencies. Subsequently, no trade was conducted, but the perpetrator made it seem as if that was the case. He used bots to buy automated cryptocurrency himself, making it seem like his counterfeit site was more popular than it actually was. Then the convicted man, together with a partner, forged a plan to shut down the site after a while and thus keep the bitcoins and other coins of customers for himself. “The deposit function of the wallets was deliberately kept open in order to get as many coins as possible into the wallets managed by the suspect before they would permanently pull the plug from the website,” the judge wrote.
In addition, the convicted man and his partner also participated in a so-called pump and dump with coins that he made himself. He first artificially inflated its value by promoting the coin on Twitter and cryptocurrency forums. Then he sold the coins in large quantities, causing the coins to lose value. The judge says the perpetrator has “grossly undermined the crypto market”. “Although an investor in cryptocurrencies may be required to exercise the highest possible caution and may be expected to know that investing in cryptocurrencies entails risks, the accused and his co-perpetrators have used their knowledge and experience of the crypto world in a shrewd manner. and fraudulent conduct grossly abused the public’s trust in social and economic intercourse.”
The man has also been convicted of committing fraud. He pretended to be an employee of Triodos and persuaded victims to scan a QR code. As a result, money from the victims was debited from their accounts. “By taking this action, they have damaged confidence in the integrity of the digital payment system,” the court said. The man is also convicted of money laundering and tapping electricity.