Crypto scandals you should know

Cryptocurrency has developed a bad reputation for being a good way for people to do fraudulent activities. But most of the cryptocurrency community agree’s that anonymity is more of an asset than a misgiving. But such events have happened, and it will be important to look at them to help prevent such activities in the future.

Mark is a perfect example of people in power taking advantage of a situation. He reminds me of old movies where robbers would invade a bank, and the manager would slip in his pocket a few bank notes hoping that his theft would still be blamed for the robbery. But for Mark, He did not take a few bills instead moved $1million to an account in his name during the chaos.

But Mark Karpelès was caught and is pleading not guilty. If convicted, he will spend five years in jail.

Trendon decided to go old school with his fraudulent activities and used one of the oldest Ponzi schemes to rip off people. He asked people to invest in his company and “promised them” a 7 percent profit every week on their “investment.”

He managed to accumulate over 7 percent of the Bitcoins in circulation at the time worth almost $900,000. He used the classic pyramid, Ponzi scheme where he would use new investors’ money to pay off old investors who would then vouch for him and get more people on board after they had early investors were making money. This then lead to a continuous loop until he did what all Ponzi scheme’s do: spend all the money and break the loop.

In the end, he was arrested and told to pay back $1.2 Million to his investors and forfeit another $1.2 million. He pleaded not guilty, but quickly changed his stand and is set to receive a one and a half year jail term.

Due to the nature of Bitcoins and how little people knew about Bitcoins back in 2013, it took quite a while before people discovered who had made money. Thomas Jiřikovský would have gotten away with it as well if he did not try to launder the money by buying a house worth $8 million. He had managed to create phony companies that claimed to convert Bitcoins to real money, and it was the perfect front to launder the money.

He soon shut down his company Sheep market after most of his customers lost their money and Bitcoin.

Ross is by far the most known Bitcoin-related criminal. He is the founder of Silk Road a website that used Tor servers and Bitcoin as a means of hiding all their activities. Tor servers at the time were the best way to hide once IP. Hence, no one would know your IP address or your location. While Bitcoin provided a way to purchase and sell services while remaining anonymous.

From most of this fraudulent case studies, it is clear that suffice many people claiming on how easy it is to use Bitcoins to do fraudulent activities; it looks that regular hackers may have a difficult time as only people with significant access to these websites have been able to pull off these heists.

Related posts:

How would you improve LinkedIn? I took a look at LinkedIn’s metrics. Over 400 million accounts with 150 million monthly active users. Users on the site spend an average of 17 minutes per month on the…

Elancharan is a multidisciplinary artist and poet. He has a strange love for all things poetical and Sci-Fi. A winner of the Montblanc X Esquire Six-word Story prize 2017. His latest publications are…

First there was a big, flat network full of broadcast packets running around which was not practical as it was utilizing precious bandwidth. To mitigate the solution, VLANs were invented and each…