Death looms over the cryptocurrency world

Of the five cold winters, this one was particularly long.

In the cold winter of the cryptocurrency industry, death has also come uninvited.

The Russian Embassy in Paris confirmed the death of Vyacheslav Taran on November 28, local time. The 53-year-old billionaire was one of the three largest foreign exchange traders in Russia. He founded the "Forex Club" and the trading platform Libertex, the latter of which included cryptocurrencies. The platform's business covers 120 countries around the world and has more than 2.5 million users.

On November 25, Taran was flying from Switzerland to Monaco by helicopter, but the helicopter crashed en route, killing two people on board - Taran and the pilot - in Villefranche-sur-Mer near Monaco.

In just one month, three cryptocurrency giants have died unexpectedly: on October 28, Nikolai Mushegia, co-founder of the US cryptocurrency lending platform MakerDAO, drowned at the age of 29; on November 23, Tiantian Kullander, co-founder of the digital asset trading platform Amber Group, died in his sleep at the age of 30.

Vyacheslav Taran, Tiantian Kullander and Nikolay Mushegian

The current cold winter in the cryptocurrency industry began at the end of 2021. Bitcoin, its representative currency, surged to an all-time high of $67,000 at the time, and then began to plummet, falling below $20,000 by the end of June this year.

The second half of the year was even more turbulent. In November, the world's second largest cryptocurrency exchange FTX went bankrupt, causing market turmoil and attracting close attention from regulators in many countries and regions. A wave of severe regulation on the industry may be inevitable.

The accidental deaths of well-known industry figures in a short period of time have aroused suspicion from the outside world and conspiracy theories have emerged. The rift between regulators and the industry during the cryptocurrency winter has also provided fertile ground for the growth of such conspiracy theories.

The three deaths are still under investigation, and the relevant departments have released very little information, and the outside world is still trying to find "unusual things" in them.

Several media outlets reported that the pilot who died with Taran was experienced and that the weather was fine that day. In addition, French media reported that there was another passenger on Taran's helicopter trip, but he/she canceled the trip at the last minute and did not board the plane.

Helicopter crash site Source: Grégory Leclerc/Nice Matin

In addition, Taran's death is one of a series of deaths of Russian billionaires this year. Since the beginning of this year, at least 10 of Russia's top billionaires and heads of several large companies have died unexpectedly. For example, two executives of the Russian energy company "Far East and Arctic Development Group", one drowned and the other had a stroke; two executives of Russia's Lukoil, one fell from the sixth floor of the hospital and the other died in the basement of the villa; the oligarchs of Russia's two major natural gas companies both died at home with their wives and daughters.

According to Russian media Life, Taran’s Forex Club had its business license in Russia revoked in 2018 for “suspected extortion of investors.”

Ukrainian news agency Unian said Taran "may have links to Russian foreign intelligence services" and laundered money through "cryptocurrency," but did not cite any evidence.

Despite constant speculation from the outside world, there is no "solid evidence". The travel company responsible for Taran's flight said that no details will be released during the investigation phase. After visiting the accident site, the Deputy Attorney General of Nice, France, only told the media that it could not be ruled out that the accident was caused by "third-party error."

An important factor that aroused people's vigilance in Taran's death was that just two days before the helicopter crash, another big name in the cryptocurrency circle died unexpectedly: on November 23, Tiantian Kullander "died in his sleep" at the age of 30. He was the co-founder of Amber Group, a global virtual asset service provider, and also a member of the board of directors of the e-sports club Fnatic.

Amber Group is headquartered in Singapore. The company has been valued at nearly $3 billion in recent months. Its official website shows that its business covers Athens, Geneva, Dubai, Hong Kong, China, London, Tokyo and other places. Tiantian himself was listed on the Forbes 30 Under 30 list in 2019. But like many companies in the industry, Amber Group is being hit hard by the cold winter and laid off about 10% of its employees in September.

Tiantian’s death became known to the outside world through a statement released by the company, but the statement only stated that he “died in his sleep” and did not mention the place of death or specific cause.

Of the three cryptocurrency figures who died within a month, the death of Nikolai Mushegia was the most unusual.

On October 28, Nikolai posted a tweet, saying that "CIA, Mossad and some pedophiles are running some kind of sex trafficking extortion ring in Pineapple and Caribbean islands," and "they will torture me to death." CIA is the United States Central Intelligence Agency, and Mossad is the Israeli Intelligence and Special Missions Agency. The two are known as the "four major intelligence agencies in the world" along with the Russian Federal Security Service and the British MI6.

A few hours later, Nicola died. The next day, a surfer found Nicola's body in the water at a beach in Puerto Rico, fully clothed and with his wallet in his hand.

Nicola grew up in Kansas, USA, the son of Russian immigrants. In 2017, he moved to Florida to focus on cryptography and has contributed to the development of multiple blockchain projects. Nicola is best known as an early technical partner of MakerDAO, an automated mortgage platform on Ethereum and provider of the stablecoin Dai. Nicola himself is apparently well-off, having donated $1.4 million (about 11 million RMB) to his alma mater, Carnegie Mellon University.

The deceased's tweets immediately attracted people's attention. The tweets can still be seen today. In the comment section, someone "tagged" Twitter's new boss Elon Musk and said: "Please protect this tweet and be extra careful about who asks you to delete it." Famous talk show host Joe Rogan talked about the incident in his podcast and even called it "crazy."

This was not the first time that Nicola had made similar remarks in his tweets before his death. He had tweeted many times, hinting that the CIA and others would harm him. It is worth noting that Nicola had a history of mental health problems, and his father even went to Puerto Rico to accompany him. Some people believe that "being killed" was just Nicola's delusion.

The New York Post reported that the police revealed that the cause of Nicholas' death is still under investigation, but they do not think it was murder. Block Pierce, a cryptocurrency practitioner who knew Nicholas, said that he was also confused about Nicholas' death at first, but after talking with many of Nicholas' relatives and friends at the funeral, he believed that it was not a murder. His parents thought that he might have been accidentally caught in the waves while surfing.

In addition, local news media reported on the Nikolai incident by saying that "a 29-year-old man (Nikolai) was dragged by the current." The area is known for its dangerous strong currents, which have caused several deaths.

Deaths in the cryptocurrency world have attracted people's attention and suspicion. In addition to the series of accidental deaths and the "unusualness" of the cases themselves, there are also historical factors.

In recent years, five well-known figures in the cryptocurrency circle have died unexpectedly. In addition to the above three, the other two died in 2018, when the cryptocurrency market was also in a cold winter.

Among them, Matthew Mellon, a descendant of Bank of New York Mellon and former chairman of the New York Republican Finance Committee, died in a drug rehabilitation center. He left behind about 1 million bitcoins (worth $1 billion at the time), but the keys went with him and his family was unable to extract them.

The death of Gerald Cotten has caused conspiracy theories surrounding him to continue to this day. As the founder and CEO of Canadian cryptocurrency trading company QuadrigaCX (hereinafter referred to as QCX), he also did not share the keys to the company's "cold wallet" with anyone. His death resulted in the locking of US$250 million (approximately RMB 1.67 billion) of 110,000 platform users, making it impossible to withdraw cash.

Cotton died on December 9, 2018. His wife issued an announcement through the company account on January 15 of the following year, announcing that Cotton died of "Crohn's disease" in India, and stated that the platform was applying for creditor protection due to "inability to access cryptocurrency reserves in cold wallets."

By February 5, QCX ceased operations due to financial problems.

Before Cotton's death, QCX was already in crisis. At that time, the cryptocurrency market was in the cold winter, and the price of Bitcoin collapsed. Many investors wanted to withdraw their principal from QCX, but many were prevaricated by reasons such as "technical failure". In addition, QCX also lost 10 million Canadian dollars (about 50 million yuan) worth of cryptocurrency due to "software failure". Then the Canadian Imperial Bank of Commerce (CIBC) froze its platform funds because it could not find the source of 28 million Canadian dollars (about 140 million yuan) in QCX's account.

It was under these circumstances that Cotton traveled to India with his new wife, where he died.

Public opinion was in an uproar. He was in the prime of life, suffered from a disease with a low mortality rate (Crohn's disease has a mortality rate of about 3%), died in a foreign country, took an untimely vacation, and nearly $200 million was locked up... Putting all the pieces together, a speculation gradually occupied the minds of people (especially those users whose money was locked up in QCX): Cotton was not dead, and this was a "fake death" conspiracy to run away with the money.

As private geeks, media and relevant departments dug deeper, people discovered more and more doubts: even if the key of the "cold wallet" was obtained, it would be useless because the "cold wallet" had long been empty; in the death certificate leaked by the reporter, the name of the deceased was misspelled, and Cotton's English name "Cotten" was mistakenly written as "Cottan"; someone posted a screenshot of Cotton's Skype page, which showed that Cotton's webcam was turned on after his death... These exacerbated people's suspicions.

At this point, the matter is no longer just an "online conspiracy theory."

The Ontario Commission of Canada (OSC) conducted a 10-month investigation into the case and issued an investigation report in May 2020. The report pointed out that QCX's operating model was like a "Ponzi scheme." Of the hundreds of millions of dollars in funds lost by QCX users, $115 million was "thanks to" Cotton's fraudulent transactions, and another $28 million was lost because Cotton used customer assets to trade on other trading platforms without informing the users.

In March this year, Netflix also launched a documentary titled "Trust No One" to investigate this unsolved virtual currency case. In April, Cotton's widow Jennifer published a new book "Bitcoin Widow: Love, Betrayal and the Missing Millions", claiming that Cotton lied to thousands of investors and deceived herself, but she also insisted that Cotton was indeed dead: "I held his hand when he died. It was a terrible moment."

To this day, there are still people who firmly believe that Cotton is still alive.

The cryptocurrency market has experienced five cold winters in total, but this time is particularly bleak.

For Bitcoin, the first “bear market” occurred in 2011. In April of that year, the price of Bitcoin exceeded $1 for the first time and soared to $32, but then fell and fell to $0.01 in a few days. It was not until 20 months later, in February 2013, that the price of Bitcoin recovered to $32.

In 2013, the price of Bitcoin broke through $1,000 for the first time, and then plummeted, falling below $700 a month later. One of the important factors was the regulation of various countries’ policies. This decline lasted for 37 months, and in January 2015, Bitcoin hit a low of $170.

In December 2017, the price of Bitcoin exceeded $20,000. But the good times did not last long. In January of the following year, the Japanese cryptocurrency exchange Coincheck was hacked, causing the NEM cryptocurrency to lose about $530 million. Its security issues kicked off the "crypto winter" in 2018.

In 2018, the price of Bitcoin plummeted to below $3,200, losing more than 60% of its value in a few months. The winter lasted for 36 months, recovering to $20,000 in 2020 and reaching a high of $64,000 in April 2021.

But history always repeats itself. While the crypto market value exceeded $1 trillion in 2021, Bitcoin once again entered a "bear market," falling below $30,000 three months after reaching its peak in April. Musk also announced in May that Tesla would no longer accept Bitcoin as a payment method, saying that "mining" was not environmentally friendly.

This decline did not last long, as it had already risen back to a high of $68,000 in November of that year. But an even more tragic decline began soon after. In June of this year, the price of Bitcoin fell below $20,000 for the first time since 2020, a drop of more than 70%, the largest drop in the history of cryptocurrency.

Today, the cryptocurrency market has been in a cold winter for more than a year and there is no sign of spring. The bankruptcy of FTX, the world's second largest cryptocurrency trading platform, in early November not only brought about a continuous "aftershock", but also severely hit the outside world's trust in the cryptocurrency industry.

After the collapse of FTX, many countries have expressed their attitude of strict regulation of cryptocurrencies, while Zhao Changpeng, the founder of Binance, the world's largest cryptocurrency trading platform, is working hard to rebuild confidence in the industry. He not only created a special plan with a capital injection of $1 billion, claiming to help practitioners affected by the FTX incident, but also expressed a welcome attitude towards regulation: "It is better to regulate the industry rather than try to fight it."

It was under such circumstances that the conspiracy theory that three figures in the cryptocurrency circle died unexpectedly one after another found fertile ground for growth.

To the outside world, Zhao Changpeng tried to convey an optimistic message, predicting that the industry will recover next year.

Not everyone thinks so. According to Business Insider, Mark Mobius, known as the "godfather of emerging market investment," predicts that the price of Bitcoin will continue to fall, even below $10,000, and the market may face a major adjustment.

Nobel Prize winner and famous economist Paul Krugman simply predicted the death of cryptocurrencies. In a recent article published in the New York Times, Krugman said that the collapse of FTX may be the beginning of the end of the cryptocurrency industry, and cryptocurrencies will enter an "endless winter."