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Bitcoin Villains

Since its creation in 2009 by the ever elusive and anonymous Satoshi Nakamoto, the world’s first ever proper peer-to-peer currency system free from any centralized control, Bitcoin has come a long way. It’s a form of digital currency more commonly referred to as cryptocurrency which uses encryption to generate and verify all transactions made. The transactions are then recorded on to a ledger which is also known as the BlockChain Network.
Bitcoin has seen its ups and downs over the years and with anything that involves any sort of profit in the world, Bitcoin too has been a victim of scams by individuals looking to make substantial amounts of money at the expense of users. One of the biggest plus points about Bitcoin is its core value of providing an unregulated system. Even though the transactions are on a public ledger, the users’ identities are not required to be maintained on the ledger. Their unique ‘wallet’ information serves the purpose of a secure storage of their Bitcoins while maintaining their anonymity.
This was all well and good until a few distinguished individuals used Bitcoin’s apathy towards regulations to their advantage in some of the biggest scams the cryptocurrency ecosystem has ever experienced.
Mark Karpeles
Former CEO of the Mt. Gox exchange, Mark Karpeles is reputably the most infamous person in the world of Cryptocurrencies. Mt. Gox exchange was launched in July 2010 and by 2013 it was already handling 70% of all bitcoin transactions. Around February of 2014, the exchange filed for bankruptcy protection from its creditors out of seemingly nowhere. Around 850,000 bitcoins went missing and were very likely to have been stolen. Their total worth at that point in time was a mind stunting $450,000,000. Yes, the number of zeros in that figure is correct. All the fingers pointed towards Karpeles and after much confusion, he was detained by the Japanese authorities on August 1, 2015 for suspicion of embezzlement and money laundering charges.
Trendon Shavers
This individual is credited with being the mastermind of the biggest scam in Bitcoin history. He raised 764,000 bitcoins using his Bitcoin Savings & Trust. The money amounted to roughly $4.5 million in US Dollars at the time. Using his ‘marketing skills’, Shavers promised his investors a weekly return of 7%. Shavers did invest some of the funds he accumulated but used money from one investor to pay another. He pleaded guilty to running a $150,000,000 USD scam in the September of 2015.
Steve Chen
He was the mastermind behind the fake cryptocurrency Gemcoin. Chen and 9 others were involved in the ‘Ponzi scheme’ which targeted US and Chinese citizens. A class-action suit of $100 million USD was filed by the victims. Their claim was that they used Gemcoin to attract investors which they’d receive prior to its guaranteed rise in value.
People like Chen, Karpeles and Shavers did a lot of damage to the reputation of Bitcoin as it was now susceptible to theft and fraud. Despite unfortunate events like these and more of similar nature, bitcoin hasn’t suffered itself because Bitcoin itself wasn’t responsible for any of the funds the exchanges hold. The victims are still recovering from the scams but the world goes on, learning as it goes.

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