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Software Engineer Loses Life Savings in Quadriga Imbroglio (bloomberg.com)
Tong Zou wasn't a stereotypical crypto bro bent on accumulating flashy trophies such as Lamborghinis when he deposited his life savings into Quadriga CX's digital exchange. The 30-year-old software engineer, who'd been working in California for seven years, just wanted to save a few bucks on transfer fees after deciding to move to Vancouver. It proved to be a C$560,000 ($422,000) mistake. From a report: "It's all my savings, so I'm just living on what little I have left and trying to start over," Zou said in a phone interview Friday from Vancouver, where he has been living out of an AirBnB for the past month. "It pretty much took everything away from me." Zou is one of Quadriga's 115,000 clients who are out of luck after the sudden death of the firm's founder left C$190 million in cryptocurrencies protected by his passwords unretrievable. The exchange has halted operations and was granted protection from creditors on Feb. 5 in Nova Scotia Supreme Court in Halifax.
It doesn't matter what you're doing, but there is an old saying about not keeping all of your eggs in one basket. Sometimes even incredibly intelligent people are capable of horrible foolishness.
At least he avoided losing his life savings because of a collapse of the global banking system.
I love how cryptocurrency is like a history lesson for Libertarians with regressive economic attitudes. They get to learn the hard way why each discrete financial regulation we have today was enacted.
You're right, I wouldn't steal a car. But if it were possible, I sure as hell would download one!
That's right but not relevant here. He wasn't do that not as an investment
It's incredibly relevant - he literally took all his eggs (money) and put them in one basket (Enquadrdriofomaligo or whatever it was called).
It doesn't matter if the purpose was investment or short term transfer.
Same reason why when traveling you would not get a bunch of travelers checks and keep them all in the same place. (not that anyone uses travelers checks anymore, but still).
He was moving to Canada from the US and wanted to save money on conversion fees
Unstated: also wanted to avoid Canadian taxes on said money.... and he paid the ultimate conversion fee instead.
It's not that I don't feel somewhat sorry for him, but I think he was way more foolish than unlucky. "unlucky" is almost always just another way to say "didn't really think through possibilities".
"There is more worth loving than we have strength to love." - Brian Jay Stanley
De-regulated? Try never regulated. People invest in imaginary money at their own peril.
You're perfectly right, if that is what he intended.\
His is a strange story. He says he wanted to just use the exchange to transfer his money - all $500,000 at once. That's a really strange choice: he is going through a third currency, meaning two transactions rather than one. The fees are going to be much higher than just an ordinary bank-to-bank transfer, plus that third currency is extremely volatile, meaning he has a lot of additional risk.
Then we have the "all your eggs in one basket" argument. With a traditional bank, that might not be a problem, but with an exchange? After Mt. Gox anyone in the IT world should understand that exchanges cannot be trusted. Multiple transactions, waiting for each one to go through before initiating the next. Or multiple exchanges. Or just leave his money in the US. Or his own offline wallet. Or, really, anything except what he actually did.
tl;dr: His story doesn't pass the sniff-test. I'm not sure what he was really doing, but it seems very likely that he was trying to bypass official notice of the assets - either their departure from the US, or their arrival in Canada. I wonder: did he make this money with crypto-speculation? And, perhaps, had never paid taxes on it?
OTOH: reality sometimes is stranger than fiction, and sometimes people really do just have brain farts...
Enjoy life! This is not a dress rehearsal.
Yeah, that is why I am really skeptical of they guy's story. If all he was really trying to do was save money on transfering between banks, transfering all his money into an exchange (which has a a fee), then finding enough sellers to convert nearly half a million dollars into crypto (which also has fees), then later find enough buyers to convert it back (more fees) and finally transfer it back to a bank? That makes zero sense unless he also believed it would be making money in the process.
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