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Some Notorious Blockchain Scandals Worth Knowing About


There are many other notorious stories in the blockchain world that one needs to know about, and some of them have been documented in various media. I list a few notorious ones as quick spoiler and links to known documentaries about it that are worth watching.

  • Quadriga CX was once the famous crypto exchange company in Canada whose debacle leading to a loss of over 250 million USD, led to public outcry and regulation in the blockchain technology. Interestingly this regulation was the very pitch that blockchain was advertising against to its gullible mob towards it with the promise of making them rich overnight. So what happened? The founder of this company, Gerry Cotten, was the only one who had access to the passwords and keys that controlled the funds of his customers, which amounted to $250 million and he apparently died under mysterious circumstances. As nice, innocent and nerdy as might have seemed, he had a past history of cyber crime, which was only known at a later date leading to a lot of speculations about his death. Do check out a nice documentary on this in Netflix and it is titled, "Trust No One: The Hunt for the Crypto King". I believe, Canada ushered in some regulations in the blockchain as a consequence of this scandal.
  • The Silk Road was an online black market that operated on the dark web, where users could buy and sell illegal goods and services using bitcoin as the payment method. The site was founded by Ross Ulbricht, who went by the pseudonym Dread Pirate Roberts, and was eventually arrested by the FBI in 2013. Ulbricht was convicted of money laundering, computer hacking, conspiracy to traffic narcotics, and procuring murder, and sentenced to life imprisonment without parole. There are quite a few documentaries on this titled, "Deep Web: The Rise and Fall of the Silk Road Documentary", "Silk Road: Drugs, Death and the Dark Web", etc.
  • The DAO was a Decentralized Autonomous Organization that ran on the Ethereum blockchain, and aimed to provide a platform for smart contracts and crowdfunding. The DAO raised over $150 million worth of ether, the native cryptocurrency of Ethereum, in a record-breaking crowdfunding campaign in 2016. However, soon after its launch, a hacker exploited a vulnerability in the code and drained more than $50 million worth of ether from the DAO. This led to a controversial decision by the Ethereum community to fork the blockchain and reverse the hack, creating two separate versions of Ethereum: Ethereum (ETH) and Ethereum Classic (ETC). The DAO hack and its aftermath have been covered in documentaries like, "Trust Machine: The Story of Blockchain", "Banking on Bitcoin", etc. 
  • BitConnect was a cryptocurrency lending platform that promised investors high returns on their investments, ranging from 1% to 40% per month. Bitconnect claimed to use a trading bot that could generate profits from the volatility of bitcoin prices. However, Bitconnect was exposed as a Ponzi scheme that used new investors’ money to pay old investors, and collapsed in 2018 after receiving cease and desist orders from several regulators. It is claimed that it has defrauded the US by about USD 2 billion. Bitconnect is widely regarded as one of the biggest scams in the history of cryptocurrency, and has been the subject of documentaries such as "Bitconnect: The Wannabe Bitcoin Ponzi Scheme | Multi Level Mondays", etc.