Communications of the ACM

Before a new breed of cryptocurrency detectives helped bring him down, Ryan Felton marketed his crypto scheme with a grandiose promise: He was creating "Netflix on the blockchain."

He called the crypto-themed streaming service FLiK. For a small amount of the popular digital currency Ether, customers could purchase a FLiK token, which would give them access to shows and movies broadcast on the new platform. Mr. Felton described the project as an "entertainment revolution"; crypto enthusiasts bought more than $2 million worth of FLiK coins.

But the streaming business never materialized. Instead, Mr. Felton bought a $1.5 million house, along with $32,000 in diamonds. He spent $180,000 more on a red Ferrari.

When cryptocurrencies hit the mainstream in the 2010s, the technology was widely viewed as a perfect vehicle for crime. A drug dealer or scam artist could transfer large quantities of money instantly, without relying on a bank to validate the transaction. To early advocates, crypto was appealing because it promised the secrecy and anonymity of cash, without the inconvenience of face-to-face exchanges.