Trader Lost $16 Billion or 260,000 Bitcoin
What led to this disaster and how did it happen?
Kevin decided to share his story with us in this post. 🧵👇
> Kevin Day, a tech enthusiast from Nebraska since the 90s, has a unique background:
◇ He worked as a video game developer on popular games such as Mortal Kombat 4 and NBA Showtime.
◇ He founded his own startup before moving into web hosting.
During his time working in web hosting, he discovered Bitcoin ($BTC) and it started to interest him.
◆. Kevin Day entered the world of Bitcoin ($BTC) when its price was $7.
> At the time, Bitcoin was gaining a lot of buzz after rising from $0.30
👌 It rose from 0.3 to $7 😅
He started his career by devoting himself intensely to Bitcoin mining.
Now we come to the most exciting part👇
◆ On June 19, 2011, Kevin faced an opportunity that changed the course of his life:
● Bitcoin ($BTC) price collapsed from $17 to $0.01 in just 20 minutes.
◆ While many panicked and got out of the market, Kevin saw this as a golden opportunity.
Place a buy order of $3,000 Bitcoin at a price of $0.0101.
◇ Kevin successfully purchased 259,684 Bitcoin for just $3,000:
■ As Bitcoin quickly recovered, his investment saw a staggering 166,000% increase.
◆ His profits amounted to about $5 million, but at today's price it would be worth $27.4 billion.
◆ Here Kevin's lucky streak suddenly stopped..
<> Kevin stored all his bitcoin on an exchange.
It is a decision that has proven to be disastrous 🤯
◆ The flash crash was caused by a hack of an exchange, where the hacker stole coins and sold them, causing the market to collapse.
◆ Shortly after, Mt. Gox announced that it would “cancel” the trades, invalidating many transactions.
<>. Shortly after, Mt. Gox revealed that 25,000 Bitcoins had been stolen:
The platform blamed its internal auditor, claiming that internal mismanagement was behind the incident.
■The cancellation invalidated all trades made after the hack.
Including Kevin's deals:
Legitimate buyers who placed orders during the crash, buying hundreds of bitcoins at rock-bottom prices, found their balances reduced to zero.
Users felt cheated and frustrated, as their transactions were completely wiped out.
● Fortunately — or maybe the opposite.
● Kevin was able to make a small withdrawal:
Out of the 260,000 bitcoins he bought, he was only able to withdraw 643 bitcoins.
● It was the maximum allowed according to the platform's policies at that time.
Here's what happened next 👇
● Bitcoin users were desperate for answers, and Kevin was one of the few who stepped forward:
< > He strongly believed that his purchase was legitimate and stood by his actions.
◆ Kevin even appeared on one of the early Bitcoin TV shows to defend himself and share his side of the story.
◆. It was clear that Kevin was not responsible for the platform's security failures:
● Mt. Gox never refunded any users affected by the hack, though the revocation set a troubling precedent.
□ Many in the community wrongly accused Kevin of being the Mt. Gox hacker, labeling him a thief.
● Some stood by Kevin, encouraging him to take legal action:
◆ Many people saw his actions as honorable, even calling him a "hero" for stepping forward.
◆ Lawyers advised him to sue Mt. Gox, but Kevin refused, focusing on the stability of the Bitcoin economy over personal profit.
● . The questions continued.
◆ Should platforms be held to the same standards as Bitcoin itself?
◆ Unfortunately, most platforms fail to give users full ownership or rights over their coins.
● As expected, Mt. Gox acted in its own best interest, canceling all trades made during the flash crash:
Kevin lost 259,360 Bitcoin.
Important advice:
Don't store all your coins on an exchange!!!
Prioritize security and control of your money.
Finally we have reached this story which is considered inspiring and take caution and caution from putting all currencies on the platforms
If you store coins for a long time use cold or hot wallets.
Don't put all your eggs in one basket
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