The crypto industry is a place where danger lurks around every corner. There are numerous horror stories here that no one wants to experience, but from which important lessons can be learned. Fortunately, today we can look back and reflect on other people’s mistakes.
Stolen from his own son
The first horror story is about a treacherous son who stole from his father. It is important to always be careful about who you trust. Unfortunately, it’s not always just strangers, but sometimes people from the family who you don’t expect.
In Washington, an elderly man experienced exactly that when his own son secretly mixed sedatives into his tea and stole $400,000 in crypto. Ironically, it was the son who originally encouraged the father into crypto investing.
In 2022, the son, Liam Ghershony (24 years old), decided that his father no longer had a right to the crypto assets. So he visited his father and offered him a cup of tea with a high dose of benzodiazepine. The father was knocked unconscious almost immediately, and the son used the father’s two-factor authentication (2FA) to take over the crypto access.
Ghershony expected his father to wake up soon, but that didn’t happen until two days later, after someone alerted the police. The father was found severely dehydrated and with organ problems and taken to the hospital while the son was arrested. The father recovered and got his tokens back, while the son went to prison.
Kidnapped and robbed
Another story of betrayal occurred in Manhattan in 2017. Louis Meza planned a heist on a supposed friend who had more than a million dollars in Ethereum (ETH) owned. To do this, Meza hired accomplices who helped with the robbery.
Meza first lured the victim into a bus-like Uber, where he was kidnapped and robbed of house keys, passwords and crypto credentials. While the victim was being held, Meza and accomplices broke into his apartment and stole $1.8 million in ETH.
Luckily, the victim managed to escape, which led to the arrest of the criminals. The majority of tokens were recoverable.
Chatty investors caught
There is also a crypto horror story in the Netherlands. In 2021, a man was attacked and abused by criminals after they found out about his crypto holdings and address.
Three men disguised as technicians entered his house and pretended to want to solve a problem. However, they soon forced him to reveal his passwords and private keys. The victim explained:
“They literally beat the code out of me.”
He also admitted that he often spoke to acquaintances about his crypto holdings, which apparently gave the criminals the information they needed. The three perpetrators fled, but the tokens were frozen during the transaction.
Maybe a zombie?
Another crypto horror story revolves around the possibly staged death of Gerald Cotten, the founder and CEO of bankrupt Canadian crypto exchange Quadriga.
Cotten has been officially considered dead since 2018, but former Quadriga users have called for one judicial exhumation of his body to make sure he is actually dead. Cotten is seen as the founder of a Ponzi scam and owes around $190 million in cryptocurrencies to over 115,000 customers.
Cotten is believed to have died in India from complications from Crohn’s disease, which is usually not fatal. Skepticism arose when it emerged that he was the sole holder of the exchange’s crypto storage passwords.
Cotten’s widow, Jennifer Robertson, was forced to hand over $12 million in assets following the scandal and said she knew nothing of her husband’s actions. Creditors demanded over $303 million, but after the bankruptcy they only received 13 percent of that.
Loss of private key leads to loss of billions
One of the most famous crypto horror stories is about private keys. James Howells, a British computer engineer who bought 8,000 BTC in 2013, accidentally threw the hard drive containing the private keys to his in the summer of that year Bitcoin (BTC) Wallet in the trash.
Since then, Howells has been searching for the hard drive and suspects it is buried in a landfill in Newport. He tried to get a salvage permit again in 2022, but it was rejected.
This shows how important it is to store private keys carefully. An estimated 3.7 million Bitcoins are lost forever because passwords were forgotten.
These crypto horror stories are a good example of how important care is when dealing with crypto. Keep them in mind!
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