Nicholas Raymond: cryptocurrency millionaire avoids jail on proceeds of crime charge

A small-time Preston drug dealer who became a Bitcoin multi-millionaire has been warned by a judge to stay away from criminal activity.

A former suburban drug dealer who became an accidental multi-millionaire when a small stash of cryptocurrency he made selling drugs online ballooned in value has narrowly avoided jail.

Nicholas Harvey Raymond, 31, of Preston, on Monday faced the Melbourne Magistrates’ Court where Magistrate Malcolm Thomas told him: “I could have easily sent you to jail”.

Raymond was instead convicted of dealing with property suspected of being the proceeds of crime, handed a 20 month community corrections order and ordered to undergo 180 hours of community work.

Raymond, in 2012, briefly dealt drugs, using Bitcoin, on the now-defunct online drug “supermarket”, Silk Road, which let people buy and sell drugs anonymously online.

He quit the site with $1300 worth of the cryptocurrency in an online account, called a “wallet”, but lost the password for nearly a decade.

The value of Bitcoin skyrocketed, and by early 2021, and at one point in 2012, Raymond’s Bitcoin was worth almost $19 million.

Nicholas Harvey Raymond leaves the Melbourne Magistrates’ Court on Monday. Picture: NCA NewsWire / David Crosling

Nicholas Harvey Raymond at the Melbourne Magistrates' Court in November. Picture: Craig Dunlop

He hired an IT guy to crack the password, paid him a $3.8 million commission, and split the rest of the money between him and his former partner, but the authorities became aware of his identity when he traded $1.8 million worth of Bitcoin for cash.

Not all of the fortune was derived from Raymond’s smalltime drug dealing, and it has all been restrained in a seperate asset confiscation case to be heard in the County Court next year.

Mr Thomas said Raymond had to be sentenced based partly on the value of the Bitcoin, but that it “does not truly reflect the criminality” of his offending.

He said Raymond’s cryptocurrency “windfall” was similar to the case of a crook making from crime, putting the money on a longshot at the races, and winning.

“I can understand the temptation, given what happened, and the windfall gain,” he said.

Ms Thomas said Raymond made a concerted effort to get his hands on the money.

However, he said Raymond attempting to pay tax on his “windfall” was not evidence he tried to launder or “wash” it.

He also said a “memorandum of understanding” between Raymond and another person about spliting the Bitcoin fortune did not support a prosecution argument that Raymond tried to hide his conduct from the authorities.

Mr Thomas said: “You need to stay well and truly away from criminal activity for the rest of your life and use your intelligence for more appropriate, legitimate purposes”.

“You got very, very close to going to jail,” he said.

Raymond was also sentenced to an adjourned undertaking on minor drugs possession and street-level trafficking charges.