A BITCOIN trader has revealed how he lost a crypto fortune worth almost $2million after his password got stolen.
The anonymous Reddit user shared his gut-wrenching story in the thread titled: “What’s your crypto horror story?”.
It is a cautionary tale of what can go wrong when you invest in the highly volatile and unregulated crypto market.
The user – TomokoSlankard – posted that the seed phrase he used to keep his Bitcoin locked away was stolen.
He claimed that hackers got into the server which he stored the code on – with the criminals then making off with his 33BTC.
33BTC in today’s money is worth $1.8million.
TomokoSlankard claimed that he had invested just $20,000 amassing his initial fortune and if it had not been stolen he would now be a millionaire.
Cryptocurrency subreddit user Cupojuice posted the thread earlier in the year where he asked the rest the 13k members for their worst crypto “horror stories”.
He said: “Instead of reading about everyone’s crypto gainz (not that I don’t love y’all making money!), I’d like to share some horror stories.”
His own tragic tale of loss was how he mined one million Dogecoin back in 2014 – only to them have his hard drive break.
It means he can now no longer recover the cash worth around $170,000.
However, that sum was just a drop in the ocean compared to poor user TomokoSlankard.
Dang, I’m not a very empathetic person, but even I feel bad for ya
“My seed phrase got stolen. It was 33 btc,” the user wrote, and went on: “It was worth $600k at the time. Now over $2m.”
When quizzed on how he lost the password – he said that his “backup server got hacked”.
Other users were sympathetic to his plight, while some slammed him for not taking more care to protect the cash.
Zancrow249 wrote: “That’s painful but not your fault. I hope you make much more than that.”
Townhouse-hater added: “Dang, I’m not a very empathetic person, but even I feel bad for ya. That sucks! S**t is life changing. Oh man…”
5 risks of crypto investments
THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
“It so painful to read such posts, can’t even imagine how did you feel, when you realized that all that money is lost,” wrote Batyrsengoku.
“I hope you will earn much more in the future.”
Meanwhile, another user sarcastically added: “Nothing you could have done to prevent that.”
Other traders also shared their tales of wow – including user Bks1981 who said he lost 80 per cent of his portfolio in one day after a series of bad trades.
Another added that he lost his Bitcoin after buying in at $6, saying it is stored “f*** knows where”.
Crypto is a notoriously volatile asset in which to invest your money – and experts urge caution when trying to get involved in the market.
Cryptocurrencies are not regulated investments so there is no safety net if things go wrong and you lose money.
Many cryptocurrencies have a short track record, making them difficult to understand and predict.
Laith Khalaf, head of investment at AJ Bell, said: “Cryptocurrencies are incredibly volatile and this applies in spades to small new coins entering the market.
“If something can go up several hundred percent in a few weeks, then it should come as no surprise that it can fall just as sharply in a short space of time.
“As ever, the golden rule of crypto is never to invest an amount that you’re not willing to lose in its entirety, so don’t bet the house on it.”