Bitconned on Netflix: A Rivetting Look at the Shady World of Cryptocurrencies, ICOs
Netflix this past weekend dropped a new documentary focusing on the decadent world of shady ICOs. In this case the focus was on Centra.
The company touted cryptocurrency financial products, including a so-called cryptocurrency debit card they dubbed the "Centra Card", which only existed as a prototype.
Steven Stradbrooke described the documentary as showing the "rot at the center of utility-free 'crypto' projects". In particular, the subjects of the documentary gleefully discussed their love of scamming people they didn't really feel any attachment to.
The self-confessed scammer in this case was Centra co-founder Raymond Trapani, who previously ran a Miami-based exotic car rental business into the ground.
“We didn’t know anything about this fucking business," Trapani says. "But it didn’t matter. It was too easy. We lied. We cheated. And made millions of dollars.”
If you haven't seen the documentary, check out the preview below but do not read any further as there are some spoilers.
#bitconned available now worldwide on @netflix pic.twitter.com/j2bUPDSRGW
— Amy Bandlien Storkel (@amystorkel) January 1, 2024
Now to the spoilers.
Trapani we soon learn did not serve any jail time for his role in the Centra scheme. His two co-conspirators did.
Robert Joseph Farkas, a/k/a “RJ,” a former stripper, pled guilty in 2020 before U.S. Magistrate Judge James L. Cott to conspiring to commit securities and wire fraud in connection with a scheme to induce victims to invest more than $25 million dollars’ worth of digital funds in Centra Tech, Inc.
Odds are good that Farkas, who served as Centra's CFO without any past experience doing so, likely got off easy due to the Covid-19 pandemic.
Craig Stewart, Attorney for the United States, said at the time of Farkas entering his guilty plea, “Farkas and his co-conspirators duped ICO investors into investing digital currency worth millions of dollars based on fictitious claims about their company, including misrepresentations relating to its purported digital technologies and its relationships with legitimate businesses in the financial services sector. Whether in the context of traditional equity IPOs or newer cryptocurrency-related ICOs, raising capital through lies and deceit is a crime.”
Centra Tech Co-Founder Sohrab “Sam” Sharma hardly got off as easy. He was sentenced to eight years in 2021, and was required to forfeit more than $36 million.
Trapani took on the role of Centra CEO and readily admitted he cooperated with the FBI to help take down Sharma and Farkas. In the documentary, Sharma is painted as a scammer without bragging about being one (he did not participate in the documentary). Farkas is interviewed throughout the documentary and doesn't come across as that bad a guy, all things considered. A deeper dive suggests Farkas was more hands on than the documentary may otherwise make it appear, hence the one year prison sentence.
It's interesting to note that Sharma admits Trapani was hardly around and spent much of his time high as a kite. Trapani confesses to having had a serious drug and gambling problem.
Ilan T. Graff, the Attorney for the United States, said of Centra co-founder Sharma, “Sohrab Sharma led a scheme to deceive investors by falsely claiming that the start-up he co-founded had developed fully functioning, cutting-edge cryptocurrency-related financial products. In reality, Sharma’s most notable inventions were the fake executives, fake business partnerships, and fake licenses that he and his co-conspirators touted to trick victims into handing over tens of millions of dollars. We will continue to aggressively pursue digital securities frauds like this one.”
The documentary makes it pretty clear that Sharma had his name, face and voice attached to the scheme whereas Trapani comes across as pretty clueless during phone interviews with a New York Times reporter whose story ultimately helped to take Centra down.
As Stradbrooke points out, history is bound to repeat itself.
"There are, of course, ample parallels to be drawn between those days of ICO infamy and the present. For instance, Australia’s securities regulator was recently called on the carpet for failing to realize that the CEO of the HyperVerse investment scheme didn’t actually exist. Suffice it to say, several thousand Aussie victims of this scam feel somewhat let down by their asleep-at-the-wheel watchdogs.
"As the saying goes, history may not actually repeat itself, but it does rhyme. As 2023 drew to a close, a flurry of so-called altcoins experienced unprecedented and thoroughly unwarranted surges in value. A handful of people got rich, countless more FOMO types got soaked, and the process starts anew. Like 2017 never happened."
- Alejandro Botticelli, Gambling911.com Senior Correspondent
