Top 10 Biggest Bitcoin Villains to Date

Bitcoin.com presents the ten most popular and well-known villains (in no particular order) that have had a negative influence on the image of Bitcoin and the cryptocurrency industry as a whole.

Also read: Scam Alert: OOOPay Claims to Support Bitcoin Payments in Russia

Top 10 Bitcoin Villains

As the world’s first ever, truly-global, decentralized, peer-to-peer currency, Bitcoin has certainly had its share of ups and downs. Some of Bitcoin’s most memorable moments have involved individuals who have used or smeared the technology for their own personal interest at the expense of the community at large. But while these individuals could certainly be called “villains” by many, it is also important to keep in mind that Bitcoin and cryptocurrency technology as a whole does not care: there’s no central control, no CEO, it is apolitical, interest-agnostic, and, at the end of the day, just a convenient protocol to transfer value online.

Nevertheless, we at Bitcoin.com hope that by shedding light on these individuals’ attempts to either smear Bitcoin, use it for fraud and personal interest, it will make the network stronger and prevent the community from falling victim to these devious practices in the future.

[Note: The list is in no particular order since it is a matter of personal opinion as to which actor was more egregious to the cryptocurrency space.]

Mark Karpeles

The former CEO of the defunct Mt. Gox exchange is probably the most infamous individual in Bitcoin history. Mt. Gox was a bitcoin exchange launched in July 2010. By 2013, it was handling 70% of all bitcoin transactions and in February 2014, the Mt. Gox company suspended its operations and filed for bankruptcy protection from creditors. It was revealed that around 850,000 bitcoins (worth about $450 USD million at the time) were missing and likely stolen with many people pointing the finger at Karpeles as the orchestrator of this possible inside job. He was finally detained by the Japanese authorities on August 1, 2015 for suspicion of corporate embezzlement and other laundering charges.

This incident certainly tarnished Bitcoin’s image, as the public still associates its name with theft, fraud and lost funds. Even though Bitcoin itself did not fail in any way and was not responsible for the centrally-held users’ funds entrusted to the exchange, the community is still recovering from the unfortunate event. There are talks about a possible Hollywood movie being made in the future about the story of Mark Karpeles and the defunct Mt. Gox exchange.

Trendon Shavers

Trendon Shavers was the operator of the largest scam in Bitcoin history. His Bitcoin Savings & Trust (BTCST) allegedly raised 764,000 bitcoins, worth roughly $4.5 million USD at the time, from investors. He promised returns of 7% per week (3,641% per year), claiming to use his market arbitrage skills.

While investing only some of these funds, Shavers was “receiving money from investor B to pay investor A,” said assistant US Attorney Michael Ferrara. In September 2015, Shavers pleaded guilty to running a $150 million Ponzi scheme.

Ryan Kennedy (aka Alex Green)

Ryan Francis Kennedy, aka Alex Green, aka Ryan Gentle (according to multiple sources who claim they knew him as a fellow student at City College Plymouth) is the alleged mastermind behind the defunct Dogecoin trading platform, Moolah. He is responsible for stealing approximately $1.4 million USD from Moolah customers. The money in question initially belonged to users of a different exchange, called Mintpal, which was hacked and pilfered of $2 million back in July 2014. Kennedy and a few other accomplices purchased the exchange a few weeks later, integrating 70,000 Mintpal accounts into their exchange. Shortly after, Moolah went bankrupt and the rest is history. 

He was also accused of stealing over 750 BTC (approx. $285,000 USD at the time) from the Dogecoin community and was dubbed as “the guy who ruined Dogecoin” by Motherboard.vice. Moreover, he has also been charged with 14 counts of sexual misconduct against 5 women, including 11 counts of rape.

Steve Chen

The mastermind behind the Gemcoin scam, Steve Chen, was charged along with nine others with running a Ponzi scheme that targeted US and Chinese citizens involving the fake cryptocurrency Gemcoin. The victims filed a $100 million USD class-action lawsuit right after the SEC began its crackdown. According to the complaint, Gemcoin was used to attract investors, which they were to receive prior to its promised rise in value.

The complaint reads:

Defendants themselves, and through their entities and agents, sold worthless assets called Gemcoins […] Defendants heralded Gemcoin as a new cryptocurrency they invited that would be revolutionary and grow exponentially in value, and that Plaintiffs could become early investors.

Jamie Dimon

The CEO of JP Morgan is referred to by many Bitcoin advocates as “the face of our oppression,” and for good reason. Dimon has said that people are wasting their time with digital currencies such as Bitcoin and that “Bitcoin the currency, I think, is going to go nowhere,” while lauding its underlying blockchain technology. He has also stated that Bitcoin developers are “Coming to eat our lunch,” to which Bitcoiners responded accordingly.

Dimon’s position can certainly be understood as he is the symbol of the current banking industry that’s in position to be disrupted by Bitcoin’s technology. Speaking at the Fortune Global Forum in November 2015, he said:

[T]here will be no real, non-controlled currency in the world. There is no government that’s going to put up with it for long […] there will be no currency that gets around government controls.

Danny Brewster

Brewster was the founder and CEO of one of the most hyped Bitcoin banking startups, Neo & Bee, based in Cyprus. In the beginning of 2014, he took off with investors’ money while simultaneously posting from public message boards with promises of reimbursement. During that time, an arrest warrant was issued for Brewster from Cyprus law enforcement that he had allegedly defrauded at least two customers who paid €35,000 for bitcoins never received. Unfortunately, Brewster was not apprehended and his whereabouts have been the speculation of the Bitcoin community since.

Surprisingly, his Twitter handle is once again active, and it appears that Brewster has resurfaced as his account has been tweeting about everything from Bitcoin to Donald Trump and ISIS.

Carl Force & Shaun Bridges

These individuals were partners in crime during their handling of the Silk Road investigation. Former task-force agent Shaun Bridges was sentenced to 72 months in prison for the theft of over $800,000 USD in bitcoin and other related felonies including an attempt to change his identity and flee the country.

Meanwhile, corrupt Silk Road DEA agent Carl Force was sentenced to 78 months in prison for crimes, which included stealing $370,000 from a customer of Bitcoin company CoinMKT, which he was moonlighting for, putting $37,000 in a government account and embezzling the rest.

US District Judge, Richard Seeborg, stated:

The extent and the scope of Mr. Force’s betrayal of public trust is quite simply breathtaking. It is compounded by the fact that it appears to have been motivated by greed and thrill seeking, including the pursuit of a book and movie deal.

Force and Bridges were involved in the investigation of “Dread Pirate Roberts” aka Ross Ulbricht, who was later sentenced to life in prison for running the Silk Road website in case that received global media attention.

Leah McGrath Goodman

In March 2014, Newsweek published an article by McGrath Goodman where she claimed to have uncovered the identity of Bitcoin’s mysterious creator, Satoshi Nakamoto. While her actions probably weren’t as egregious as many of the individual on this list, she brought on much unwanted attention from the press on the accused Dorian Nakamoto, receiving a lot of criticism from the Bitcoin community in return.

“If someone was telling you they don’t want to be known, and you report a story about that person’s life and put up a picture of him and his home, that’s a bit f–ked up,” said Michael Goldstein, creator of the Satoshi Nakamoto Institute. However, the silver lining in this debacle was the introduction of Dorian to Bitcoin – not to mention that he has also become a popular face in the community as a result.

Benjamin Lawsky

Former Superintendent of New York’s Department of Financial Services (NYDFS), Benjamin Lawsky, is most notably known as the creator of the infamous 44-page document called the “BitLicense.” It is not only the first comprehensive Bitcoin regulation in the US, but it is also the most restrictive. It received much criticism from the Bitcoin industry for stonewalling innovation and fattening the pockets of incumbents. The introduction of the bill resulted in an exodus of companies leaving the state in protest, including ShapeShift, Poloniex, Xapo, and BTCGuild, just to name a few.

Moreover, Lawsky also faced criticism for his revolving door approach when it turned out that he was leaving the NYDFS to start a private consulting firm. The Bitcoin community was appalled to find out that Lawsky’s new firm would focus on helping digital currency companies navigate New York’s regulations — yes, the ones he created.

Josh Garza

Homero Joshua Garza was brought up on civil charges for the alleged operation of a Ponzi scheme by the SEC. Garza and his associated companies — GAW Miners and ZenMiner — are currently being tried in court for selling $20 million USD worth of a cloud mined product called “hashlets.”

The complaint reads:

The defendants’ hashlet sales had many of the hallmarks of a Ponzi scheme.

“As alleged in our complaint, Garza and his companies cloaked their scheme in technological sophistication and jargon, but the fraud was simple at its core: they sold what they did not own, misrepresented what they were selling, and robbed one investor to pay another,” added Paul G. Levenson, Director of the SEC’s Boston Regional Office assigned to the case.

The SEC alleges that Garza initiated conspired fraud with these “hash-shares” and was also involved with a series of other plotted events, which included his altcoin Paycoin and the Paycoin Foundation.

Do you agree with the list? What other villains have negatively impacted Bitcoin? Let us know in the comments section below!

Images courtesy of Twitter, villainstournament.wikia.com

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