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From deceiving hedge fund investors to significantly increasing the price of life-saving drugs, Martin Shkreli isn’t necessarily someone who should be welcomed into the cryptocurrency space with open arms.
‘The Face of Corporate Greed’
Shkreli sparked outrage in 2015 when his pharmaceutical company bought the rights to a drug used to treat a parasitic infection and increased the price from $13.50 to $750 per tablet overnight. This price hike meant some patients using Daraprim would face bills worth hundreds of thousands of dollars a year.
He was later charged and convicted of securities fraud, with a jury finding that he had deceived investors in his hedge funds. During the trial, prosecutors claimed Shkreli had openly bragged about having $40 million in assets under management when, in reality, he had just $300 in the bank. It was alleged that investors lost $11 million due to his actions.
The entrepreneur described the verdict as “a witch hunt of epic proportions,” but even his own lawyer admitted that Shkreli’s brash style on social media was problematic. In March 2018, Shkreli was sentenced to seven years in prison. Despite his attempts to show remorse, he was released in May 2022, less than halfway into his sentence. However, his legal battles were far from over.
A Pharma Ban and a Wu-Tang Clan Album
Shkreli faced further consequences for his 5,000% price hike of Daraprim earlier this year, when a three-judge panel concluded that he should be banned from participating in the pharmaceutical industry for life. The appeals court pointed to “Shkreli’s pattern of past misconduct, the obvious likelihood of its recurrence, and the life-threatening nature of its results.”
In another scandal, Shkreli paid $2 million for a one-of-a-kind Wu-Tang Clan album in 2015, which was handed over to U.S. prosecutors following his conviction. Recently, PleasrDAO, the decentralized autonomous organization that bought the album for $4.75 million, sued Shkreli amid claims he made copies of the record and redistributed them to the public. It’s even alleged that Shkreli held a listening party attended by thousands of people.
Shkreli’s Crypto Era
Now banned from ever running a public company, Shkreli has turned to the cryptocurrency space. He has become embroiled in the TrumpCoin debacle that took the crypto community by storm. There was feverish speculation that this altcoin had been officially launched by the Trump campaign, but confirmation was not forthcoming.
Shkreli claimed he created DJT on the Solana blockchain in concert with Trump’s youngest son Barron, but there are question marks over the truth of this claim. As CEHV partner Adam Cochran pointed out, this could land Shkreli in more legal trouble:
“Shkreli’s 3-year parole terms require him to give full financial statements and avoid any self-employment involving access to client money or investments, as well as avoiding other crimes. So either he goes to jail for fraud, or he managed an investment opportunity on behalf of Barron and goes to jail for violating terms of parole.”
After years of excesses, hacks, and larger-than-life figures who defrauded everyday investors, the crypto industry has been trying to rehabilitate itself. Shkreli joining the ranks of noisy influencers launching memecoins might drag these efforts back to square one.
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