The crypto world, while being a realm of rapid growth and opportunities, can also be filled with terrifying and risky outcomes, reminiscent of a Halloween horror movie. Unfortunately, many of these horror stories could have been prevented with simple precautions. If only the characters in these stories had the foresight—just like those movie characters who should never have entered the abandoned cabin in the woods. Now, let’s take a journey into these chilling tales and learn how to avoid the dark side of crypto investments.
Betrayal: The Price of Trust
Betrayal is common in the crypto world, as sometimes the greatest danger comes from those closest to you. For example, an elderly man in Washington had his own son offer him a cup of tea laced with a sedative, attempting to steal his digital wallet. The tea, containing a high dose of a depressant, caused the father to lose consciousness. During this time, the son accessed his father’s phone and tried to steal $400,000 worth of crypto. However, the plan backfired; the father was found unconscious two days later, and the son was arrested. This story serves as a reminder that trust can be risky, even in the closest relationships.
Another tale of betrayal occurred in Manhattan in 2017. Louis Meza targeted a friend, a crypto investor, kidnapped him, and stole his wallet information. Fortunately, the victim managed to escape, leading to the arrest of Meza and his accomplices, who were eventually caught with most of the stolen assets.
Loose Lips: The Dangers of Social Media
Bragging about your crypto assets on social media can be dangerous. In 2021, a man in the Netherlands faced a serious attack after criminals discovered his crypto holdings through his social media posts. Three men, posing as troubleshooters, forced their way into his home and demanded his passwords. The victim later admitted that he had frequently spoken about his crypto assets around others, likely revealing enough information for the criminals to track him down. Although the attackers fled the scene, the stolen funds were frozen on the exchange.
But this isn’t an isolated incident. In the same year, in the UK, a gang kidnapped a 14-year-old boy after learning about his crypto investments through his social media posts. Thankfully, the boy was released after his mother was forced to pay a $1,000 ransom. One of the kidnappers was tracked and arrested days later.
Platform Collapses: When Trust Fails
In the crypto world, the risks don’t come only from criminals but also from the platforms you trust. In 2022, when the FTX platform collapsed, investors lost millions. An anonymous investor, who had $650,000 before the crash, now lives paycheck to paycheck, struggling with debt.
Similarly, a medical student who had invested their savings in BlockFi faced financial ruin when they were unable to withdraw their funds. Centralized exchanges can collapse, highlighting the need to protect your assets by securing your private keys and using non-custodial wallets.
Faking Deaths: Legal and Financial Schemes
In the crypto realm, intrigue can extend even to death itself. Take the case of Quadriga’s founder, Gerald Cotten, whose death in India is still shrouded in mystery. Cotten’s death was attributed to complications from Crohn’s disease, but many former Quadriga users believe his death was faked, considering the exchange went bankrupt owing 115,000 users around $190 million. Skeptics point to discrepancies such as the misspelling of Cotten’s name on his death certificate and the fact that he was the only person with access to the cold wallet’s private keys.
Some believe Cotten faked his death as part of an exit scam, while others speculate that Quadriga was a Ponzi scheme from the start. Regardless, the scandal has left his widow, Jennifer Robertson, facing lawsuits and scrutiny, forcing her to forfeit $12 million in assets. Creditors have claimed losses exceeding $303 million, but so far, only 13% of that has been recovered through bankruptcy proceedings.
The Nightmare of Losing Private Keys
Properly safeguarding your private keys is the first and most crucial lesson in crypto. Did you know that about 3.7 million Bitcoin are permanently lost because people continuously forget or lose their private keys? This issue extends beyond Bitcoin alone. Non-custodial funds mean you are solely responsible for accessing and managing your funds. If you lose your keys, no one can recover them for you.
A classic example is the story of James Howells, a British engineer who purchased 8,000 Bitcoin in early 2013. However, his nightmare began when he accidentally threw away the hard drive containing his private keys while cleaning his office that summer. Ever since, Howells has been determined to retrieve his Bitcoin, believing the hard drive is buried somewhere in a landfill in Newport, South Wales. His latest proposal (as of 2022) involves using AI-powered robotic arms to sift through the trash with the help of a $12 million fund.
In another unfortunate incident, Ivan Bianco, a popular crypto influencer, accidentally revealed his private keys during a live stream about DeFi earnings. An opportunistic viewer acted swiftly, stealing around $60,000 worth of crypto assets. Always keep your private keys secure, and never show or share them with others!
Zombie Investments: Bad Investment Choices
Wrong investment choices and bad platforms can lead to massive losses in the crypto world. For instance, the LUNA crash of 2022 caused many investors to lose their savings. This tragic event emphasizes the need for investors to research not only popular platforms but also the credibility and technical details of projects. Similarly, during the ICO (Initial Coin Offering) craze, many investors fell victim to scams due to a lack of proper investigation, resulting in significant losses.
When making investments, always conduct thorough research, read technical reports, and carefully examine the teams behind the projects. Additionally, keeping your assets safe in a non-custodial wallet ensures that your investments are secure, even if the platform
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