Key Takeaways
- With so much at stake, there is no shortage of fallen high-profile figures in the cryptocurrency world, including Changpeng “CZ” Zhao, Sam Bankman-Fried, Ross Ulbricht, and others.
- Among their charges are fraud, money laundering, and conspiracy, leading to major fines and prison sentences.
- While some, like CZ, seek pardons and try to rebuild their reputations, others, like Ross Ulbricht, are hoping for clemency under the incoming Trump administration.
- With 2024 sealing the fate of some well-known crypto rogues, and 2025 promising further dramatic shake-ups for the industry, let’s check in on crypto’s biggest cons.
A lot can change in just 12 months, especially in crypto—a high-stakes arena where ambition, greed, and innovation coexist. It’s also where people misunderstand technology, scams are rampant, and influential figures attract massive followings; big names can rise and fall with astonishing speed.
2024 has been a theatrical year for some of the crypto industry’s most notorious figures. This article will examine where these crypto villains are now, what went wrong, and what to expect in 2025.
Where Are They Now? Crypto Cons Edition
The crypto industry is full of dramatic stories: incredible successes and devastating failures. Some of the biggest names in crypto have fallen from grace, facing accusations of fraud, greed, or simply making bad decisions. These controversial individuals left a lasting impact, from the founders of top exchanges to the operators of shadowy marketplaces.
| Name | Company | Crime | Outlook 2025 |
|---|---|---|---|
| Changpeng “CZ” Zhao | Binance | Facilitating over $10 billion in illicit transactions and weak anti-money laundering controls | Seeking a pardon while maintaining ties with influential figures like Elon Musk. The future remains uncertain. |
| Ross Ulbricht | Silk Road | Conspiracy to launder money, traffic narcotics, commit computer hacking, and operate a criminal enterprise | A potential pardon under President-elect Donald Trump remains a possibility. The future remains unclear as he serves a life sentence. |
| Ilya Lichtenstein | N/A | Laundering billions of dollars in stolen Bitcoin from the 2016 Bitfinex hack | Currently in prison. His story serves as a reminder of the risks of digital crime and the traces it leaves behind. |
| Alex Mashinsky | Celsius Network | Securities fraud, market manipulation, and operating a Ponzi scheme | Serving a seven-year prison sentence. Creditors continue their fight to recover lost funds, leaving the Celsius saga ongoing. |
| Sam Bankman-Fried | FTX, Alameda Research | Misusing billions in customer funds for risky trades, leading to one of the largest crypto frauds | Serving a 25-year prison sentence. There is no chance of early release while the industry continues to recover from the FTX scandal. |
Changpeng “CZ” Zhao
Changpeng “CZ” Zhao was once a towering figure in the cryptocurrency industry. As the founder of Binance, the world’s largest crypto exchange by trading volume, CZ built a platform that handled over $3.5 trillion in monthly transaction volume at its peak.
Known for his rapid rise to wealth, CZ’s fortune rose to $96 billion in January 2022, briefly placing him among the world’s wealthiest individuals. Binance became the go-to place for millions of crypto enthusiasts, offering a wide range of trading and investment services.
However, the tide turned in 2023. US regulators accused Binance of facilitating over $10 billion in illicit transactions. They found the exchange to have weak anti-money laundering controls and allegedly allowed users in sanctioned countries, such as Iran, to trade on its platform. In 2024, CZ faced criminal charges and was forced to resign as CEO. Binance was hit with a $4.3 billion fine, the largest penalty ever imposed on a crypto company.
While the crypto market has shown signs of recovery, CZ’s future in the industry remains uncertain. His relationship with Elon Musk and his openness to receiving Trump’s pardon could change his career trajectory in 2025. Can he rebuild his reputation and return to the top? Only time will tell.
Ross Ulbricht
Ross Ulbricht is best known as Silk Road’s creator and operator. Launched in January 2011, Silk Road provided a platform where users could anonymously buy and sell illegal goods and services, including drugs and counterfeit documents. Using the pseudonym “Dread Pirate Roberts,” Ulbricht managed every aspect of the operation while maintaining a hidden identity.
The site generated an estimated $192 million in sales between mid-2012 and late 2013, relying on Bitcoin for transactions under the mistaken belief it offered untraceable anonymity. Ulbricht’s vision for Silk Road was bold, but his role as its architect ultimately made him its most visible target.
Ulbricht’s downfall began when law enforcement infiltrated Silk Road. After months of undercover work, the authorities arrested Ulbricht in a public library in San Francisco. Along with his capture, authorities seized 144,000 Bitcoins, worth approximately $8.8 billion at today’s prices. He was charged with conspiracy to launder money, commit computer hacking, traffic narcotics, and operate a criminal enterprise. In 2015, he was sentenced to life imprisonment without the possibility of parole.
By 2024, Ross Ulbricht had spent over a decade behind bars. Many crypto enthusiasts have advocated for his release, including US President-elect Donald Trump, who promised during the Bitcoin conference earlier this year that he would commute his sentence if elected again. While Ulbricht’s future remains uncertain, the possibility of a pardon means it’s worth following his story in 2025.
Ilya Lichtenstein
Known for his tech-savvy skills and entrepreneurial ventures, Ilya Lichtenstein portrayed himself as a digital innovator. But behind the scenes, he and his wife Heather Morgan had orchestrated the largest theft of all time, hacking Bitfinex crypto exchange in 2016 and stealing around $80 million Bitcoin. The stolen Bitcoin lay dormant for years, increasing in value to more than $4 billion in the process. Meanwhile, Lichtenstein and his wife lived seemingly ordinary lives in New York City.
Lichtenstein’s elaborate scheme to launder the stolen funds had involved a web of fake identities, online wallets, and even gift cards. But his attempts to cover his tracks failed. In 2022, the FBI uncovered a trail of digital breadcrumbs, leading them to Lichtenstein and his wife. Authorities seized 119,000 Bitcoin, making it one of the largest financial recoveries in US history.
2024 finally saw the case reach a conclusion, with Lichtenstein pleading guilty to money laundering charges in October. He was sentenced to 60 months and will begin 2025 finally serving time for the notorious hack – a far cry from his former life of excess and eccentricity.
Alex Mashinsky
Alex Mashinsky, the founder of Celsius Network, once promised to improve finance. He lured investors with promises of high cryptocurrency returns, depicting a future where traditional banks were obsolete. Celsius quickly became a crypto darling, attracting billions from everyday investors. By 2021, Celsius managed over $20 billion in assets, making it a prominent player in the crypto market.
But the dream soon turned into a nightmare. Investigations revealed that Celsius operated a Ponzi scheme, using new deposits to cover losses. When Celsius froze withdrawals in June 2022, panic ensued, and Celsius declared bankruptcy shortly after. Investors were left holding the bag, unable to access their funds. Mashinsky faced serious charges, including securities fraud and market manipulation.
In 2024, Mashinsky pleaded guilty to one count of commodities fraud and one count of securities fraud, carrrying a potential sentence of up to 30 years in prison. He is due to be sentenced in Spring, making 2025 the year when Mashinsky’s fate will finally be decided. With thousands of investors still waiting to recover their funds, it’s a story worth watching closely in the coming 12 months.
Sam Bankman-Fried
Sam Bankman-Fried (SBF) was once the poster boy of crypto innovation. As the founder of FTX, a cryptocurrency exchange, and Alameda Research, a trading firm, SBF quickly became prominent in digital finance. FTX attracted millions of investors with its slick marketing and celebrity endorsements. By early 2022, FTX was valued at $32 billion.
But this was a house of cards. SBF misused billions of dollars from customer funds, gambling them away on risky trades at his trading firm, Alameda Research. SEC investigators scrutinized the company’s finances, revealing fraud, poor accounting, and personal excesses, including luxury real estate purchases. Investors and users lost billions.
In 2024, SBF was convicted on multiple fraud charges and sentenced to 25 years. His trial exposed a web of deceit and recklessness, painting a picture of a young man who let ambition and greed cloud his judgment. The former tycoon is in for a very different life in 2025, remaining behind bars with no prospect of early release.
The crypto industry has started to recover, with Bitcoin breaking $100,000 in December 2024, but the scars of the FTX scandal linger.
Closing Thoughts
2024 has been a year of reckoning for some of the cryptocurrency world’s most notorious figures. As we look ahead to 2025, the question remains: can the industry truly move on from the scandals and frauds that have rocked it to its core?
While some crypto figures seek redemption or hope for clemency, their actions have left lasting scars on investors and the market’s integrity. Their stories are a constant reminder that people, not computers, threaten the success of the crypto industry.
