For all of the hoopla about the rising price of bitcoin, there’s a dark side that is just now being investigated thoroughly. Most market participants know that bitcoin is used for a long list of reprehensible activities including money laundering, tax evasion, arms dealing, terrorist finance, drug dealing and child pornography. But, the story gets worse.

Even aside from illegal transactions, the bitcoin exchange market is rife with fraud. This article reports that almost 1,000,000 bitcoins — worth over $5.5 billion at today’s price — have been stolen. Even larger amounts are locked up in unregulated and disreputable exchanges where they cannot easily be converted back into hard currencies such as U.S. dollars.

When you look behind the curtain at the “hundreds of millions of dollars” supposedly raised in initial coin offerings (ICOs) you discover that a lot of the ICO proceeds are paid in other crypto-currencies (for example, I can buy a token in one ICO using another token acquired in an earlier transaction). The huge dollar amounts touted are just conversions using “market” prices (although the markets themselves are manipulated). There are no actual dollars, euros or yen in sight. Just went you think the story can’t get worse, it does.

This article describes an international legal shootout between two tech entrepreneurs and the head of a Swiss foundation they established to conduct their ICO. The ICO famously raised “$232 million,” (but not really because what they actually got was 66,000 bitcoins and 361,000 ethers worth….well, whatever they’re “worth” today). You get the idea. This ICO and the development project are a complete mess, but there’s a pony in there somewhere.

Check out the complete article for all of the gory details. There’s greed, backstabbing, and technology all in one place. A great read.