Members of a Blackpool gang have been handed jail sentences following a £20 million Bitcoin fraud.

Lancashire Police welcomed the sentencing and said those involved stole so much money that they struggled to spend it.

The fraud began in 2017 when James Parker (below), who lived in a council flat in Blackpool, discovered a glitch in an Australian cryptocurrency trading website which allowed him to steal money.

He and his co-conspirators siphoned off more than £20m worth of credits over a three-month period. Parker’s corrupt financial adviser Stephen Boys, who earned the nickname ‘Rodney’ from Only Fools and Horses, helped launder the stolen funds.

The scam made so much money that £5,000 gift cards were handed out to people in the street and cars were bought for people Parker met in the pub.

James Parker

During the trial Boys told the court how he took £1m cash in a suitcase to buy a villa from Russians he met in the back office of an estate agent and paid £60,000 to pay off corrupt officials so he could carry on laundering money.

When fellow fraudster Kelly Caton rang police to report that her daughter had stolen 15 Bitcoin, the suspicions of officers led to the investigation.

“It made us wonder ‘how does this lady who lives in modest circumstances, a very small rented home in Blackpool, possess such hidden wealth?’,” Det Sgt David Wainwright, of Lancashire Police’s Fraud Unit, told BBC North West Tonight.

He added that the gang “struggled to spend the money… the wealth they came across was probably too much for them to comprehend themselves.”

During the investigation police recovered 445 Bitcoin, then worth £22m, along with luxury watches, houses, cars and designer goods, including a £600 wine cooler, along with more than £1m in bank accounts. Police said the value of any assets will be returned to the victims.

Blackpool gang proceeds

Lancashire Police worked closely with international law enforcement, including in Australia and Finland, and the Crown Prosecution Service to bring the gang to justice.

Det Sgt Wainwright stated: “The scale of the fraud in this case is absolutely staggering and led to the suspects literally having more money than they could spend.

“I would like to pay tribute to all the agencies who worked closely together to bring these people to justice.”

Parker died in 2021 before he could be prosecuted but the other fraudsters were convicted last year and sentenced on Friday last week.

Boys was given six years for converting criminal property. Caton and Jordan Robinson each got four-and-a-half years for conspiracy to commit fraud, two years for acquisition of criminal property and two years for converting criminal property.

James Auston-Beddoes was sentenced to one-and-a-half years for conspiracy to commit fraud, one year for acquisition of criminal property and one year for converting criminal property.  His sentence has been suspended for one year.

Cryptocurrency shorts

FTX says that around $415m of crypto has been stolen by hackers – $323m from its international exchange and $90m from its US platform – since the firm filed for bankruptcy. Meanwhile former CEO Sam Bankman-Fried, currently on bail on fraud charges relating to FTX’s collapse, said the company’s lawyers at Sullivan & Cromwell have presented an “extremely misleading” picture of the company’s finances. He insists that FTX US has “more than enough” money to repay customers in the country.

Venture capital firm Digital Currency Group (DCG), parent company of crypto broker Genesis Global Trading, has halted its quarterly dividend payments to shareholders as it attempts to preserve liquidity. Genesis reportedly owes creditors more than $3 billion and its customers have been unable to withdraw funds since November.

Ukraine’s Deputy Prime Minister and Digital Minister Mykhailo Fedorov says the country will become the world’s leading jurisdiction for crypto assets. It raised money for its armed forces through crypto following Russia’s invasion. Fedorov said he will be the first Ukrainian to take his salary in e-hryvnia when the planned central bank digital currency launches.

HashKey Capital has announced a third fund totalling $500 million to advance crypto and blockchain initiatives globally.

Crypto prices

The overall market cap of the 22,300 coins is at $995 billion at the time of writing (7am UK), a 0.7% increase in the last 24 hours.

For round-ups of recent cryptocurrency news developments, click here.

For valuations of the top 100 coins by market cap in US dollars, plus 24-hour price change, see below.