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PAX Trading > BUYING BITCOINS > Top 10 Bitcoin Frauds of all time
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I’m definitely sure hearing the word fraud is not new to you but the preceding word Bitcoin must have given you goosebumps. Well don’t be scared, these top 10 Bitcoin frauds of all time have sharpened bitcoin to what it is now and have improved the world of cryptocurrency. The top 10 bitcoin frauds are associated with funding criminals, money laundering, Ponzi, gambling etc.

You will agree with me that Bitcoin is now a household name as it progressed so rapidly in the past few years. However, there is a call for us to look back at its humble beginnings for they should not be despised. The following frauds were picked based on its occurrences in past times.

Here at the Top 10 Bitcoin Frauds of all time

10| Bitcoin Ponzi Schemes

A Bulgaria based company; One Coin reportedly operated regardless of the EU and national laws on Capital markets. It buys and sells via its own internal exchange which means it is not an open source and should have no need of a block chain. It was therefore regarded as a Ponzi scheme.

9| Extortion

Following the emergence of the IS, the Syrian Electronic Army reportedly demanded that ransom be paid in Bitcoin for the release of prisoners of war. This is definitely not why Bitcoins are being mined and it is a clear indication of fraud.

8| Money laundering

You will agree with me that this is a thorn in the flesh of economists worldwide as it is a huge problem in this modern time. Coin Mx. a Bitcoin Exchange Company allegedly transacted with online criminals whom they were aware of and yet still forged ahead by exchanging Bitcoin for cash.

7| Scam

A Next Generation’s Bank reportedly claimed the ability to offer different services such as at the ability to store value in 135 currencies including cryptocurrencies, escrow services and lots more. However, it turned out that the bank only scammed investors and in return, affected the reputation of cryptocurrency. What a fraud!

6| Associated Kidnapping

It was reported that the family of the Chairman of Pearl oriental Oil, Wong Yuk-Kwan were asked to pay a ransom of HK$70 million through a Bitcoin account as the criminals engaged the use of cryptocurrencies for their own benefits.

5| Drug

I am sure you must be acquainted with the fact that people believed that Bitcoin is used to buy drugs on the internet. A man who bears the name Shiny Flakes sold around 4 million British Pounds worth of tablets, hashish, and LSD from his mother’s flat via cryptocurrency. This then encouraged drug users in supporting the legalizing of drug sales on the web in an undercover for their criminal act.

4| The Silk Road Fiasco

This was one of the few cases in Cryptocurrency to have garnered high media publicity at its occurrence. It was definitely a jaw breaking one as it was an integral part of the reasons why Crypto had to be improved.

3| Gambling Dens

It is of note that gambling is an activity with high presence on the deep web and it won’t be a surprise seeing it in my top 10 Bitcoin fraud list. It was reported that the operator Seals with Clubs, a Bitcoin poker site was charged for gambling and although he acted on the defense that bitcoin is not the same as currency.

2| Bitcoin Figure Saga

A well known figure in the cryptocurrency community, Charlie Shrem reportedly committed a lot of offences which includes selling over US$1M in Bitcoin on the Silk Road and operating unlicensed transactions. The founder of BitInstant who also took up a position at Bitcoin Foundation however agreed that he screwed up.

#1: The fall of Mt. Gox

Now here we are at our number one top ten Bitcoin Fraud. This particular fraud is known to be the reason why Japan resisted Bitcoin temporarily and led to the birth of distrust on Bitcoin. It was reportedly believed to be a simple internal mismanagement but little did we realize, that it was masterminded by a man named Karpeles. The collapse of Mt. Gox retarded the growth of Bitcoin and it will never be forgotten in the history of Bitcoin.


However, all these frauds really gave a huge blow to the rapid growth of cryptocurrency but then, it was a blessing in disguise. It indeed sharpened and developed the urge for an improved technology of crypto that we have today.

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