Since the inception of cryptocurrencies, scandals have been one thing that have been closely associated with them. One of the largest scandals was the Mt. Gox exchange scandal of 2014. At the beginning of the year 2014, the exchange stopped the withdrawal and deposits of funds on its network. After a few days, the developers of this digital exchange platform announced that they have gone bankrupt. This announcement hit the Bitcoin market so hard and according to experts, the impacts of this scandal is still felt by many today.
In just a few months later, another scandal hit the crypto market. Co-founder of the Silk Road which is a black market platform that trades Bitcoin. According to the reports, the co-founder was found guilty of drug trafficking, computer hacking as well as money laundering conspiracies. This news also affected the crypto market but Bitcoin was the most affected as the platform specialized in the trading of BTC tokens.
Another major cryptocurrency scandal is that of the Bitconnect. Prior to its launch in 2016, there was no other previously developed platform with the same model as that of Bitconnect. This crypto platform had a four-tier system where the more money users invested, the more profit they stand to get. For example, if a user invests about $1,000 he could get about tens of millions in a three years time frame. At that time, this crypto grew to become one of the largest platforms in the world and it had a market capitalization of $2.2 billion. For a couple of months, this crypto managed to hide its dirty secrets but its increasing growth caused the authorities to take notice of it and in 2018, the Securities Board of Texas filed a case against them. This case was filed because the board claimed that the crypto should have been registered as a security. A cease and desist order was issued against the company, this made them close down their operations and also stopped the issuance of BCC tokens. A few weeks after the cease and desist order was issued to the platform, the North Carolina division of the Securities board filed a lawsuit against the platform. The Securities board claimed that the crypto was running a fraudulent operation and the board went further to state that the platform was operating illegally and so should be permanently shut down by the court. Shortly after this, the crypto platform shut down its exchange and lending platform.
As of February 2018, about 6 people have again filed a lawsuit against the company. The representatives of these aggrieved individuals have announced that they want to take back all or part of the money they invested in the platform. They went further to claim that the crypto conned their clients into investing a huge sum of $771,000. This six aggrieved individuals have chosen to remain anonymous but have taken a pseudonym "Crypto Watchdogs".
These are a few of the scandals that have faced the cryptocurrency market.
