The man who took $190M to the grave

We are deep in the forest, living together. Wrapped in blankets, sitting on old fishing chairs by the crackling fire.

The night is a bit scary. But that’s the point – it is Halloween, after all.

“How about I tell you some horror stories?” i say

“Sure,” you smiled. “But you jump Pennywise, Freddy Krueger type stuff None of this scares me anymore.”

“Oh, trust me,” I reply. “That’s scarier than any clown or chainsaw.”

I moved closer to the fire.

“I’m talking about… cryptic horror stories.“

*thunder sound*

1/ The Exchange that Vanished

Once upon a time, there was a crypto exchange called Mount Gox.

And he wasn’t alone some exchange – Mt. Gox was crypto In 2013, it handled almost 70% of everything Bitcoin business

But behind the scenes, the exchange was bloody. For years, hackers have been stealing BTC through cracks in the code – completely unnoticed.

After a cold February morning in 2014, users logged in and… they could not withdraw their money.

Mt. Gox announced: 850K BTC (worth about $500M then and billions now) was missing.

Lack of security and mismanagement caused the biggest loss in early crypto history

The exchange failed, and creditors are still waiting for repayment.

To this day, every time someone says, “My coins are safe on the exchange,” an old trader somewhere whispers…

“Mt. Gox”.

2/ When the Rebel Code

ethereum the first dreams were pure: a decentralized utopia where code dominated greed.

In 2016, The DAO was born – a crowdfunded venture capitalist built entirely on smart contracts. The project raised $150M in ETH.

But the code, like magic, hides curses.

An anonymous hacker found a flaw in a smart contract, and this flaw allowed them to drain ETH from the DAO treasury again… and again… and again.

This resulted in ~$60M in ETH drained.

Now, the money was not gone from the network – it was locked in a “child DAO” controlled by the hacker, but still visible on the blockchain.

The developers realized that they could stop the thief by changing The history of Ethereum just before the theft took effect – Basically rolling the blockchain back to an earlier point and returning the stolen ETH.

But that broke one of the core principles of crypto: the blockchain should never be rewritten.

However, the devs made the controversial decision, and split the blockchain in two: :

👻 Ethereum (ETH) – the saved chain;

👻 It is Ethereum Classic (ETC) – the original intact.

And from that fork, blockchain learned to fear…

3 / The CEO who took the keys to his grave

In the winter of 2018, Gerald Cottenfounder of QuadrigaCX, Canada’s largest exchange, flew to India.

Soon after, something terrible happened… It was declared dead – complications related to Crohn’s disease, they said.

And with him, $190 million in user funds.

The exchange announced that no one had access to the company’s cold wallets. No backup. No recovery. Just one man’s encrypted laptop, and a community left to stare into the abyss.

Then came the questions. It was him indeed dead? Because the coins were moving later his death?

Netflix even made a documentary about it, but the truth was buried.

And now, every Halloween, someone always checks the blockchain – half hoping, half afraid – to see those portfolios come back to life.

4 / The collapse felt in the world

Do Kwon promised stability – the perfect stablecoin.

Unlike other stablecoins like USDC o TetherTerra’s UST was not backed by dollars in a bank. Has been algorithmic.

The idea was:

👻 If UST went below $1You can burn UST to mint $1 of LUNA, Terra’s sister token, and sell that LUNA for profit;

👻 If UST went above $1you could mint UST burning LUNA.

So the system relied on traders doing this over and over to keep the UST stuck at $1.

The investors came more than $60 billionattracted by the “decentralized money outside banks” narrative and Anchor’s (Terra’s main app) 20% “risk free” return.

UST has become the #3 stablecoin by market capitalization. LUNA has reached triple-digit prices. Terra seemed too big to fail. Regulatory, VC, retail – everyone was watching. Do Kwon felt unstoppable.

But then, in May 2022… the algorithm breaks.

The UST fell below $1, traders rushed to exit, and the peg unraveled. Each redemption for LUNA printed more tokens, making the price of LUNA to collapse and speed up the death spiral.

In three days, both coins were almost worthless.

Retail investors begged for answers as exchanges halted withdrawals. Do Kwon tweeted: “Deployment of more capital – steady guys.”

But no capital could save them. The fall of Terra set off a domino effect that consumed entire companies.

It wasn’t just a failure. It was contagious.

5 / The New Exchange of Emperors

Sam Bankman-Fried he was the golden child of crypto – a hooded billionaire who preached “effective altruism” and promised to make crypto respectable.

His exchange, FTXit was everywhere: stadium names, celebrity announcements, political handshakes.

Behind the curtain, however, FTX secretly funneled billions in customer deposits to its sister company, Alameda Research – who played it all with FTX’s token, FTT, as collateral.

But in November 2022, a leaked budget expose the illusion.

Binance publicly abandoned his FTT holdings, panic broke out, and traders rushed to withdraw. Within days, billions were gone, and FTX froze withdrawals.

The empire collapsedwhich reveal an $8B hole and staggering mismanagement.

Sam’s penthouse in the Bahamas has become a symbol of betrayal; his empire, a cautionary tale. Prosecutors called it one of the biggest financial frauds in history.

And in 2024, SBF was sentenced to 25 years in prison.

The collapse of FTX has shattered faith in crypto. His ghost still haunts the trustless ideal that Satoshi Nakamoto dreamed of…

A branch snaps behind us. We both froze.

“Waiting for what?” whispers

“Yeah… is anyone there?” I wonder, my voice cracking a little.

Look around.

“I just hope it’s not Sam Bankman-Fried.”

“No, don’t worry,” I say. “He’s in jail.”

The wind howls. Fire roars.

Somewhere in the dark, footsteps crunch in dry leaves.

“…or is he?” 😈

Now you are in the know. But think about your friends – they probably have no idea. I wonder who could fix this… 😃🫵 Spread the word and be the hero you know you are!