u/BigInspector1873

You all remember this one, but it's aged like fine schadenfreude.

Alex Mashinsky ran Celsius, a crypto "bank" whose actual slogan was "Unbank Yourself." Every week he'd go live in a t-shirt telling people the banks were robbing them and they should park their crypto with him instead, where it was 'his words' safer than a bank. The reward for this safety was up to 17% interest, which as we all know is a totally normal and sustainable thing for a "savings account" to pay.

To fund those yields, Celsius took the deposits everyone thought were safe and shoveled them into risky bets and DeFi degeneracy. Meanwhile Mashinsky told everyone he was "HODLing" the company's CEL token right alongside them, while quietly selling $48 million of it at propped-up prices. We're all in this together, etc.

Then in June 2022, when Terra took the whole sector down, Celsius froze withdrawals. Over a million people locked out overnight, $4.7 billion gone, straight into bankruptcy. His wife started selling t-shirts that said "Unbankrupt Yourself," which is honestly the most self-aware thing anyone in this story ever did.

This past May he got 12 years and has to forfeit the $48M, no appeal. Turns out the boring, "obsolete" bank he told everyone to abandon has this quaint feature called deposit insurance, plus a rule or two about not lying to depositors. Safer than a bank, indeed.

A refresher for the newer butters, because this one's a classic.

Do Kwon, Stanford guy, self-styled "cryptocurrency king," famous for telling critics they were too poor to debate, built a "stablecoin" called UST that was supposed to stay worth exactly $1 forever, with zero reserves backing it. Just an algorithm and a sister token, LUNA, propping each other up. Two magic beans leaning on each other. To pull people in, the attached "Anchor" protocol paid 20% interest, because nothing says "stable" like a yield you can't get anywhere in the actual economy.

The "algorithm holds the peg on its own" part was the entire pitch. It was also a lie; when UST slipped off the peg back in 2021, Kwon secretly paid an outside trading firm to shove it back to $1, then told everyone the code did it.

In May 2022 it slipped again, and this time there was no catching it. UST falling forced the system to print absurd amounts of LUNA, which tanked LUNA, which forced it to print even more, the famous death spiral. LUNA went from ~$80 to functionally zero in days, supply ballooning into the trillions, and around $40 billion evaporated. It then dragged Three Arrows, Celsius and Voyager down with it and helped kick off the crypto winter. The judge reckoned there were maybe a million victims.

The kicker: this past December he got 15 years, with the judge calling it "a fraud of epic generational scale." So the man who said his critics were too poor to talk to now has 15 years to think it over. Turns out "1 dollar = 1 dollar" needed an asterisk.

We spend a lot of time here on exchanges losing everyone's coins. OneCoin skipped a step: there were no coins.

Ruja Ignatova, aka "Dr Ruja," the self-anointed Cryptoqueen raised somewhere around $4 billion (some say a lot more) selling OneCoin as the "Bitcoin killer." Wembley Arena, red ball gown, fireworks, full tent-revival energy. The catch, established later by investigators: OneCoin had no blockchain. None. The "coins" were just numbers in a company database that staff could type higher whenever the mood struck. Mining? Fake. Ledger? Never existed. It was an MLM where the product was a spreadsheet cosplaying as the future of money, and millions of people bought in.

Then in October 2017, with investigators closing in, she got on a flight from Sofia to Athens and evaporated. She's been on the FBI's Ten Most Wanted list since 2022, sandwiched between cartel bosses. To this day nobody knows where she is: one leaked Bulgarian police document claims she was murdered and dumped at sea by a crime boss; other investigators reckon she's alive and simply very good at hiding, with fresh trails turning up in London property as recently as late 2025.

So, a fake coin with no blockchain, ~$4 billion gone, and a fugitive queen who's either at the bottom of the Adriatic or sipping something expensive under a new name. "Have fun staying poor" did a lot of heavy lifting in the 2010s.

Everyone here knows the headline, Canada's biggest exchange, founder dies abroad, takes the only passwords to the grave, ~$190 million gone. But it's worth revisiting, because the details somehow keep getting funnier.

Gerald Cotten wasn't just the CEO of QuadrigaCX. He was the CEO, the founder, and the sole director. One man with all keys, no backups, no co-signers. The entire "cold storage" model of the country's largest exchange was Gerry knows the password. Be your own bank, except Gerry was everyone's bank.

In December 2018 he died suddenly in India: complications from Crohn's, age 30, on his honeymoon. He'd signed his will less than two weeks earlier (not suspicious at all). The exchange announced that, the passwords died with him, and roughly 115,000 users could no longer reach about $190 million (Canadian so a bit less in USD). Hundreds of millions sitting in wallets anyone can see on-chain, and not one living person with the key. Trustless technology working exactly as designed.

Then Ernst & Young came in to dig through the wallets, braced for a tragic password problem. Instead they found the cold wallets had been sitting empty for months. The money wasn't locked. It was already gone.

Per EY's reports, Cotten had spent ages funneling customer funds into accounts he secretly controlled, trading against his own users, inventing volume, pulling crypto out the back. Two of the alias accounts he used were named "Aretwo Deetwo" and "Seethree Peaohh." He was draining a national exchange's customer deposits while logged in as R2-D2 and C-3PO.

By late 2019 the victims' lawyers were unconvinced he was even dead and petitioned the RCMP to exhume the body to confirm it was him. Years later, creditors clawed back roughly 13 cents on the dollar.

So next time someone explains that crypto removes the need to trust intermediaries: QuadrigaCX removed the intermediary, the regulator, the backup, and the accountability, and replaced all of it with one guy named Gerry, who may or may not currently be dead. Number go up.