Was Martin Shkreli Really Just Scammed Out of $15m in Bitcoin?

The "most hated man in America" claims he has spent $15 million using bitcoin to buy the exclusive rights to
Photo: Martin Shkreli (Photo: Bloomberg)

The pseudonymous nature of bitcoin attracts many scammers, blackmailers and other malcontents that think they can get away with everything – but in some cases its harder to tell who is the real victim.

According to the twitter postings of Martin Shkreli, it seems he was just duped out of $15 million paid in bitcoin for the exclusive rights to a new Kanye West album. However, in online forums people doubt if the transaction really happened or if the recently notorious figure is only trying to attract even more attention to himself.

Who is this guy?

Martin Shkreli is the 34 year old co-founder of the hedge fund MSMB Capital Management and the ex-CEO of Turing Pharmaceuticals.  In September 2015, he was labeled “the most hated man in America” by some in the international media after his firm hiked the price of an HIV drug from $13.50 to $750 per tablet. In December Shkreli was arrested by the FBI on charges of securities fraud unrelated to the drug scandal.

Less than two weeks ago, on Thursday, February 4, 2016, Shkreli appeared in Washington DC in front of the House Committee on Oversight and Government Reform, for a hearing on prescription drug prices, and again received harsh criticism for his behavior. He declined to make any comments to the committee, saying: “On the advice of counsel, I invoke my Fifth Amendment.”

Hedge funds can deal in very diversified types of instruments but Shkreli seem to like to speculate on an extremely rare thing by any standard – rap albums. In November, 2015, he won an auction for the Wu-Tang Clan’s “Once Upon a Time in Shaolin” for $2 million. And earlier this month he showcased an offer letter of $10 million to become the sole owner of Kanye West’s album “The Life of Pablo”.

The deal unfolds

Seven hours ago he claimed to have completed the “Pablo” deal for $15 million and even to be finished with the transaction using bitcoin. He then started offering the album for sale to online publishers for a starting price of $25 million:

Screenshot: Twitter

However, just a couple of hours later he claimed he was duped:

Screenshot: Twitter
Screenshot: Twitter

Despite running his business almost transparently on Twitter, Shkreli refuses to share the blockchain info proving the deal citing fears of getting hacked. However, as the transaction would have been for around 38,000 BTC, not a common sight or something that can easily fly under the radar, it is possible that blockchain experts would soon be able to track it down if it did happen.

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