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Inspection of hackers devices finds £200,000 in encrypted digital safe

Convicted TalkTalk hacker had hardware wallet with cyptocurrency which parents accessed

A teenage hacker who as part of his sentence was ordered to have his internet enabled devices examined routinely by police officers was found to have £200,000 in cryptocurrency in a digital safe with a 24-word password.

The parents of Elliott Gunton, now aged 20, were this week given suspended prison sentences for moving cryptocurrency from a seized hardware wallet in a "misguided" attempt to help him.

Carlie and Jason Gunton's son was convicted in 2016 for his role in the cyber-attack on the telecommunications giant TalkTalk.

He was convicted of further hacking offences this year and had been denied bail during the police investigation as a result of his parents' actions, Norwich Crown Court heard on Wednesday.

Gunton found a vulnerability in TalkTalk's website and shared details of this online. While he did not exploit the information for gain, others did after he exposed the vulnerability.

TalkTalk said the fallout from the cyber-attack in October 2015 cost it £42 million and the personal data of nearly 160,000 people was accessed.

As part of his sentence, police would periodically inspect his internet-enabled devices, and it was as a result of this that officers detected further suspected computer misuse.

Gunton was arrested in June 2018 and a hardware wallet was seized. The hardware wallet, which could be used as a digital safe for cryptocurrency like Bitcoin, was protected with a 24-word password, Norwich Crown Court heard on Wednesday.

It could not initially be accessed by police but Gunton provided the password when asked in September 2018.

Kevin Barry, prosecuting, said Gunton's parents would regularly visit their son in prison while he was on remand. After one of these visits in August 2018, police discovered that cryptocurrency had been transferred out of the reach of the seized hardware wallet by someone using Jason Gunton's laptop.

He said that £200,000 of cryptocurrency was transferred and while it was not all shown to be criminal, tens of thousands of pounds of it was.

Officers visited the separate addresses of Gunton's mother and father, who are separated, Mr Barry said, and the money was later transferred back. In a recorded prison phone call, Carlie Gunton told her son that "we had moved the money and we're now in trouble", Mr Barry said.

Officers found a piece of paper with the 24-word password written on it in Mrs Gunton's recycling bin.

Gunton remained in custody until his court case concluded in August this year. He was given a 20-month prison sentence for hacking offences and money laundering but was immediately released from the court as he had already served his jail time while on remand. He was also ordered to pay back more than £400,000.

£240,000 of the seized Bitcoins were sold at auction on Monday and Elliott Gunton still faces an indictment in California.

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