Where are they now? Top 5 bitcoin criminals

Wednesday 02 March 2016

Bitcoin is cleaning up its act, but every now and again it’s worth recalling its colourful history. Here are five of its most notorious figures.

1. Mark Karpeles, aka MagicalTux, aka [censored]
Claim to fame: running the now-defunct MtGox, the first bitcoin exchange in the world. At one point Gox handled almost 70 percent of all bitcoin transactions.
Crime: mismanagement, incompetence, fiddling the accounts and just possibly (allegedly) snaffling a fat stack of customers' bitcoins for himself. Karpeles magically lost 850,000 bitcoins, then valued at $450 million. 200,000 bitcoins later turned up unexpectedly down the back of the exchange’s sofa - or, as believably, in an ‘old format’ wallet - raising questions about whether Karpeles was able to find his buttocks with both hands, a mirror on a stick and a map. Later investigation found that MtGox was largely held together with sticky tape and wishful thinking. To this day, it’s unclear whether Karpeles was a bungling incompetent or an outright thief.
Where is he now? Arrested in Japan for embezzlement, he faces up to five years in prison if found guilty.


The long arm of the law stretches into cyberspace and even the grubby world of bitcointalk

2. Ross Ulbricht, aka Dread Pirate Roberts (DPR)
Claim to fame: running the Silk Road, the dark market that sold drugs in exchange for bitcoin.
Crime: see Claim to fame. He was arrested for money laundering, computer hacking, conspiracy to traffic narcotics and procuring murder. In his defence, Ulbricht tried to make out that Karpeles was DPR, but the judge wasn’t buying it. He was convicted of the first three offences; despite having paid for murder-for-hire, the murders hadn’t been carried out. The case brought bitcoin back into the headlines, raising questions about personal freedoms, and why it’s so hard to hire a decent murderer nowadays.
Where is he now? Serving life without parole in New York.

3. Charlie Shrem, aka ‘four-fingered Charlie’ (due to having a ring with his private key inscribed on the inside)
Claim to fame: co-founding and running BitInstant exchange, and being a founding member of the Bitcoin Foundation.
Crime: laundering funds for the Silk Road and failing to report suspicious transactions to the authorities, as well as operating an unlicensed money transmission business. Shrem is an early adopter and bitcoin evangelist, and has been involved in numerous initiatives to further digital currency.
Where is he now? Serving 2 years in the Lewisburg Federal Prison Camp in Pennsylvania, where he continues to advocate bitcoin. Apparently, he still has access to Twitter

4. Trendon Shavers, aka Pirateat40, aka the Bernie Madoff of Bitcoin
Claim to fame: being Pirateat40 (his handle on the bitcointalk forum)
Crime: running Bitcoin Savings and Trust, a huge ponzi scheme from bitcointalk back in 2011-12, promising improbably high returns of 7% per week and paying early investors with newcomers’ money. It was bitcoin’s first proper securities fraud, and at one point involved 7% of all bitcoins then in existence.
Where is he now? Shavers was arrested after the scheme collapsed in 2012, and eventually pleaded guilty to securities fraud in September 2015. He is currently awaiting sentencing and is likely to serve around 3 years.

5. Craig Wright, aka Satoshi Nakamoto (very briefly)
Claim to fame: being bitcoin’s elusive creator (very briefly), and then a big fat liar.
Crime: Wright is under investigation by the Australian tax authorities. It seems that the evidence that supported him being Satoshi (leaked to various news outlets and published back in December 2015) was his own construction, possibly some kind of tactic to distract from his financial problems or give him some kind of leverage.
Where is he now? At large, possibly hiding somewhere in the UK.

Any other favourite criminals? Let us know!

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