Cryptocurrency Community Helps to Clean Up Crypto Theft Circle

On January 23, 2019, Europol released information on the arrest of a 36-year-old man they have on suspicion of fraud, perpetrated against the members of the IOTA community and others. This was a significant and extremely unfortunate event that, thanks to a collaborative effort from law enforcement and the IOTA community, is now being brought to justice.

Timeline

From what we have learned and has been reported, we have pieced together the following sequence of events. On January 19, 2018, criminals began moving tokens en masse from compromised wallets. For at least six months prior, a fraudulent seed generator website had been used to collect individual user seeds. The news surfaced in the Discord #support channel, with users reporting that their wallets were emptied. The #IOTA community quickly came to the rescue and tried to safeguard funds whenever possible. It continued for several days and, in the meantime, the news spread like wildfire.

It is no secret that the event struck the IOTA Foundation, which was, at the time, in its very early days. Many new team members were getting onboarded, structures were being built, processes were in development. The Foundation started only a few months earlier, with only the founders and the core developers on board.

Over the next weeks, IOTA Foundation helped law enforcement wherever possible by delivering time and resources. In that period, the HelloIOTA forum reached out and started another forum to collect all victim data, which quickly became flooded with information. Alexa and Winston from the HelloIOTA forum contacted the Foundation, and together, a reporting format was developed.

The victims started to get a central voice, and the gathered information was handed over to the German police. The IOTA Foundation remained in close contact with the HelloIOTA members and the police to provide assistance. Meetings with police staff took place to inform them on the technology, analyze leads and inform them on routes to explore. Within a few months, the investigation had progressed and it became clear where the malice started.

From that time on, patience was the only tool available. The legal machinery continued to progress. Since this became an international affair, it was clear that it would take some time.

Even during periods of silence, the communication lines with the authorities of different departments in different regions remained open.

What’s next?

Patience is paramount at this time, as everyone is entitled to have a fair trial and defense. If you believe you are a victim that has not come forward or feel you have information related to this investigation, please reach out to the local police.

On behalf of the IOTA Foundation, we are proud to see collaboration between so many different entities lead to this arrest, and are grateful that this very serious issue is moving towards a resolution. We would like to thank: