Tech
“Bitconned” tells the true story of the Centra Tech Crypto scam
Inexperienced cofounders, a non-existent product, and a mysterious CEO who seems to have disappeared: what could go wrong? Bitconnectedthe new documentary by director Bryan Storkel (The outlaw Pez), taps into the cryptocurrency craze of the late 2010s and reveals the story of Centra Tech, a cryptocurrency company conceived by a pair of South Florida hustlers with a knack for Photoshop and a penchant for living large.
“Crypto [was] precisely this new unexplored territory, completely unregulated by the SEC,” explains Centra co-founder Ray Trapani in the doc. “Whenever you find a market like that, you just have to figure out how to exploit it [it].”
Trapani and his colleagues successfully did just that for a time, raising millions of dollars through unregulated fundraising along the way. But when to New York Times journalist – and eventually, the authorities – dared to start asking questions, Centra’s web of lies was exposed. Using original interviews with Trapani, his family and his co-conspirators, as well as with a victim who poured money into Centra and with the investigators who ultimately brought the company’s wrongdoings to light, Bitconnected sheds light on how easy it can be to create the illusion of a legitimate business. After all, what is a scam if not a business venture placed firmly on the wrong side of the law?
Who is Ray Trapani?
A self-styled scammer, says Trapani Bitconnected who has always been attracted to illegal activities. “Ever since I was a child, I always wanted to be a criminal,” he says in the document. “It was never like, ‘I’m going to be a doctor’ or ‘I’m going to be a scientist.’ If I could have written it in the yearbook, I would have written, “I want to be a criminal.” ”
In Bitconnected, Trapani says his first attempt as a teenager to realize his dream was to use a stolen prescription book to obtain drugs, which he and his friends could then resell at a high price. When the plan failed, he teamed up with two former classmates in a legitimate business: renting exotic, luxury vehicles to Miami’s wealthiest clientele. Rampant spending and shady business expenses threatened the company’s future, and spiraling debt and depression eventually led Trapani to attempt to take his own life. When Sam “Sorbee” Sharma, a high school friend and one of his car rental colleagues, informed him of the incredible potential of the booming cryptocurrency market, Trapani saw a golden opportunity to recover the money he had he needed to repay his loans – and then some. This is how Centra Tech was born.
What is CentraTech?
In 2017, Trapani and Sharma launched Centra Tech, which purported to raise funds through an initial coin offering (ICO) for a cryptocurrency called Centra. Centra, like other cryptocurrencies, including Bitcoin, Ether and Dogecoin, is a kind of digital currency whose transactions are conducted through a decentralized system, i.e. without relying on any bank or government. In addition to the currency itself, Centra Tech also said that it was in the process of creating a real debit card that would easily allow users to spend Centra and many other virtual currencies in real time.
“Centra was the archetype of what was wrong with cryptocurrency,” Nathaniel Popper, the New York Times journalist who ultimately exposed Centra’s fraudulent claims, states in the doc. “In a way, Centra was the story of cryptocurrencies themselves, that is, a business that hides something real, but keeps failing… and yet people keep coming back to it.”
According to Centra Tech’s website, the company’s proposed debit card would be operated on the Visa network, and the mastermind behind the project was well-versed in the world of business and finance: the executive team boasted Ivy League degrees and years of experience . work for established financial institutions.
The only problem? None of these details were true.
“We knew nothing about this damned thing,” explains Trapani in the documentary. “But it didn’t matter at all. …. We lied, we cheated, we made millions of dollars.”
In 2017, an unprecedented number of new cryptocurrencies began offering themselves directly to investors through ICOs, a sort of unregulated form of crowdfunding.
“During the ICO boom, there were people doing these serious projects – guys with PhDs from Stanford, from MIT – at the same time that there were these guys who were agents at car rental companies in Miami raising exactly the same amount of money as MIT graduate students, without any experience,” explains Popper.
What happened to Ray Trapani and Centra Tech?
As the ICO money arrived, the Centra Tech team acquired the backing of big-name celebrities like Floyd Mayweather Jr. and DJ Khaled, which only increased its popularity among investors. When Popper began working on a story about celebrity endorsements of cryptocurrencies, he reached out to Centra to discuss his A-list ambassadors and discovered something about the business wasn’t right. Flattered by the attention of the news newspaper, Trapani accepted an interview and invited to Times photographer to visit the new Centra offices.
Under intense scrutiny, cracks in Centra’s core promises began to show, especially as investors and journalists began asking more questions about Michael Edwards, the company’s CEO. Presenting him as a financial industry veteran, an original businessman and a ghost investor more content to work behind the scenes than speak directly to the press, Centra announced that Edwards had died tragically in a car accident and that a new CEO: the grandfather from Trapani. .
When Popper’s story was published and the world saw Centra’s discrepancies in the press, it wasn’t long before the authorities came knocking. The Securities and Exchange Commission filed a complaint against Centra, at which point the money began to evaporate, and the company’s biggest players — Trapani, Sharma, and alleged stripper-turned-chief financial officer Robert Farkas — were eventually convicted of several crimes. Sharma pleaded guilty to conspiring to commit securities fraud, wire fraud and mail fraud, and is still serving his eight-year sentence. Farkas pleaded guilty to conspiring to commit securities fraud and wire fraud. He served a year in prison and was released. Trapani, who cooperated with federal authorities and pleaded guilty to 10 counts, including securities fraud and wire fraud, was sentenced to time served.
Clock Bitconnected on Netflix now.