Bitcoin trader jailed after hiding millions worth of BTC from U.K. court

A British man was jailed for nearly five months after failing to disclose his Bitcoin holdings during a legal dispute with another cryptocurrency trader. 

Graham Darby, 50, was sentenced to 18 months in prison for contempt of court but was released after serving 146 days and apologizing, according to Wales Online.

The case stemmed from a failed cryptocurrency transaction between Darby and Zi Wang, a 22-year-old Australian trader. The two had agreed to swap 30 Bitcoin (BTC) for 400,000 Tezos (XTZ), with plans to reverse the trade after two years. 

However, Wang claimed Darby failed to return the Tezos as agreed, resulting in losses of between £900,000 ($1.14 million) and £1.3 million.

Wang alleged that after Tezos’s value increased, Darby blocked him on Telegram and refused to uphold the agreement. Darby denied wrongdoing, saying Wang had simply “done less well out of the transaction.”

When the case reached the High Court, Darby failed to disclose that he still controlled 100 Bitcoin—worth around £8 million.

Cybercrime investigator Richard Sanders provided expert testimony, uncovering Darby’s extensive network of digital wallets. Darby denied ownership, claiming he had forgotten his wallet passwords. However, Sanders’ findings convinced the court otherwise.

Darby missed a key hearing, leading Judge Keyser KC to rule against him. He later attended another hearing, stating he had struggled to secure legal representation. The judge found that Darby had “put his head in the sand” and sentenced him to 18 months, with the possibility of early release if he apologized.

Crypto breakdown

While in prison, Darby reportedly suffered a breakdown. His daughter helped him secure legal aid, and he ultimately admitted contempt, apologized, and settled with Wang. 

Lord Justice James Dingemans, who reviewed the appeal, acknowledged Darby’s mental health struggles and legal difficulties. He ruled that Darby had complied with court orders and reduced his sentence to time served.

Following his release, Darby compared his experience to the UK’s Post Office scandal, saying, “The system is broken.” His case highlights the legal complexities surrounding cryptocurrency disputes and the importance of full financial disclosure in court.