Missing Bitcoin and lost execs: Halloween’s creepiest crypto mysteries

As someone who has spent a significant portion of my professional life navigating the complex and often unpredictable world of cryptocurrency, I can attest that this industry is unlike any other. The tales of QuadrigaCX’s Gerry Cotten and the Cryptoqueen, Ruja Ignatova, are chilling reminders of the darker sides of the digital economy.

The realm of cryptocurrency is abundant with tales of losses and deceit, ranging from undiscovered millions on discarded hard drives to elusive founders.

These chilling tales provide an insightful peek into the unforeseen hazards associated with Bitcoin (BTC) and cryptocurrencies, as well as showcasing the extent of determination individuals exhibit in their pursuit of regaining lost digital riches.

This Halloween, CryptoMoon dives into six of the most spine-chilling mysteries in crypto.

The haunted hard drive and lost Bitcoin in a trash tomb

Over the past twelve years, I’ve been intrigued by an unusual phenomenon hidden beneath the mounds of trash at Newport’s landfill site in the UK: a phantom Bitcoin fortune has been slowly accumulating value. This ghostly digital asset has remained undiscovered, waiting patiently for its time to reveal itself amidst the piles of discarded debris.

Back in 2013, an IT professional named James Howells carelessly discarded a hard drive in a dumping ground. This gadget, containing around 8,000 Bitcoins, had a market value of about $1 million at that time. However, given the surge in Bitcoin prices since then, it’s now worth over half a billion dollars.

Howells imagined multiple attempts to uncover his hidden digital wealth. However, every expedition encountered the inflexible opposition from the keepers of this technological vault, which were the local authorities.

The landfill, bombarded with roughly 110,000 tonnes of garbage, has become a grave for Howell’s Bitcoin — currency that is lost yet immeasurably valuable.

Howells has sued the Newport City Council for 495 million British pounds ($643 million).

On December 3rd, I will present my findings that could potentially kickstart the investigation into the supposed presence of Bitcoin at the Newport waste site. The outcome of this case may decide whether we proceed with the hunt or let the mystery persist indefinitely on that desolate piece of land.

The undeletable zombie Bitcoin of the immutable ledger

Every time Bitcoin is lost, it leaves behind a tale – tales of hastily written passwords on bits of paper, digital wallets deteriorated by the environment, and investors who carried their cryptographic legacies to the tomb.

According to data from Glassnode, an estimated 1.5 million BTC are “probably” lost forever.

As a researcher, I find myself observing these seemingly dormant digital assets that occasionally reawaken. Some of these assets, slumbering for over a decade, stealthily migrate onto trading platforms, providing anonymously identified future millionaires with the opportunity to capitalize on their long-held patience.

But some of them, no matter how long the wait, never return.

People who follow Bitcoin closely often check the wallets associated with Satoshi Nakamoto, a mysterious figure believed to own over a million Bitcoins, in hope of discovering some activity that may indicate the elusive Bitcoin inventor is still active.

But some coins are better left untouched.

In much the same vein as Satoshi put it, “Lost coins increase slightly the value of every other coin. You can consider this as a small donation to all.

The tethered phantom of USDT

Day by day, the reach of Tether expands significantly, as the market value of its stablecoin, USDT, soars to a staggering $120 billion.

However, despite its tranquil facade, whispers abound about this stablecoin, resembling the mist that hangs over a cemetery. These whispers narrate stories of untraceable reserves, covert transactions, and regulatory bodies said to be looming like scavengers.

Occasionally, it seems like a hidden signal prompts mutterings that Tether isn’t all it appears to be. Whispers of investigation can be found in the darker corners of the internet, causing a chill to run through both investors and traders.

On October 25th, it was exclusively revealed by the Wall Street Journal that there is an ongoing criminal probe by U.S. federal authorities regarding Tether, due to allegations of money laundering involving third parties who misused USDt (Tether’s dollar-linked cryptocurrency).

Tether CEO Paolo Ardoino brushed the report as “old noise.”

The fear is palpable: If Tether collapses, it could drag the entire industry into the abyss. A market crash, spurred by a failing stablecoin, remains a fresh yet painful memory for investors, and the prospect of reliving such a nightmare could depeg one from reality.

When Bitcoin reaches unprecedented peak values, the community gathers on forums and social media platforms, sharing stories about the most recent source of concern.

As a researcher, I’ve just learned that there are rumors circulating about a potential re-investigation into Tether. The mix of anticipation and apprehension in the air is palpable.

When Bitcoin cools, Tether fears subside, but neither ever disappears entirely.

The disappearance of QuadrigaCX’s founder

Serving as the youthful head of QuadrigaCX, which used to be Canada’s most significant cryptocurrency trading platform, Gerald Cotten managed vast sums of digital funds.

In the chill of December 2018, I tragically found my life taking an unexpected turn, leaving behind crucial access to approximately $190 million in cryptocurrencies.

The events surrounding Cotten’s death were as puzzling as they were unexpected. While traveling in India with intentions of establishing an orphanage, the 30-year-old CEO apparently died due to complications related to Crohn’s disease.

Only following his demise did it emerge that Cotten was the sole holder of the keys to QuadrigaCX’s cryptocurrency wallets. This meant not only were the funds locked away, but further scrutiny exposed a tangled mess of financial mishandling.

In the course of Ernst & Young’s role as court-assigned overseer in the bankruptcy of QuadrigaCX, they discovered six digital wallets containing Bitcoin. Regrettably, by the time these wallets were examined, five of them had been dormant and unused for several months preceding Gerald Cotten’s reported demise.

The remaining wallet had only a minimal amount of Bitcoin left.

Further investigations uncovered that substantial amounts of cryptocurrency had been transferred off the platform to competitor exchanges into personal accounts controlled by Cotten. It is suspected that these funds were used to fund Cotten’s lavish lifestyle and possibly to trade on other exchanges.

To this day, some still believe that Cotten faked his death and fled with the funds.

The Cryptoqueen’s vanishing act

Ruja Ignatova, also known as the “Cryptoqueen,” is the infamous founder of OneCoin, a cryptocurrency that was later exposed as a multibillion-dollar Ponzi scheme.

In 2017, Ignatova stepped out of the limelight coinciding with a surge of probes into OneCoin’s activities in numerous nations. At present, her whereabouts and condition (whether she is living or deceased) remain a mystery.

OneCoin was pitched as an innovative digital currency, on par with Bitcoin, promising substantial profits for investors. Yet, in reality, it didn’t possess a genuine blockchain system and essentially sold valueless tokens. Ignatova and her team faced allegations of swindling investors, amassing approximately $4 billion, according to estimates.

Following her vanishing act, multiple speculations about Ignatova’s current location have emerged. Some theorize that she might have adopted a different identity, possibly facilitated by advanced falsifications and cosmetic enhancements, and is enjoying a lavish life in an unspecified hideaway.

Some people are suggesting that her death might be linked to the possibly perilous criminal ties associated with the OneCoin operation.

2022 saw the inclusion of Ignatova on the FBI’s list of Top 10 Most Wanted Fugitives. This recognition came alongside accusations against her for offenses such as wire fraud, violations in securities trading, and money laundering.

No conclusive evidence has confirmed her status or location.

Crypto exchanges caught in the dark

In cryptocurrency trading, fortunes can be made and lost in the blink of an eye.

Losses don’t necessarily occur due to a market crash or a sudden regulatory crackdown but rather something far more unpredictable and terrifying: sudden blackouts at the most crucial moments across major exchanges.

Back in January 2018, the planned two-hour update for the cryptocurrency exchange Kraken unexpectedly led to a prolonged downtime of 48 hours instead.

In March 2021, Binance found itself in turmoil. A sudden increase in trading activity, an unprecedented rush unlike anything before, caused the exchange to malfunction. Binance momentarily shut down, leaving trades in a suspended state, and dashing hopes just as quickly as it cleared the numbers on the trade boards.

These blackouts are not isolated incidents, nor are they limited to these examples or exchanges.

Blockchain networks like Solana have also experienced their own downtimes.

As the industry progresses and becomes more established, such incidents are occurring less frequently. Yet, it’s impossible to foretell when or where the next power outage might occur. For a trader who thinks they’ve discovered their life-changing 1000x memecoin, even a single blackout could significantly alter their fortunes.

2024-10-31 15:35