Thread by @pete_rizzo_

He bought 260,000 #Bitcoin for $0.01 each

His exchange ERASED the trade

The TRAGIC STORY of Kevin Day, who lost $16 billion in the biggest crypto rollback in history 👀

1/ Kevin Day was a 1990s geek from Nebraska.

A video game developer, he worked on classics like Mortal Kombat 4, NBA Showtime, and NFL Blitz.

He even once met Luke Skywalker himself – Mark Hamill

2/ In his spare time, Kevin worked on the internet.

When his startup closed in the Dot-Com Crash, he went on hosting websites.

That’s what attracted him to #Bitcoin – he loved the freedom of web culture.

3/ Kevin joined #Bitcoin when the price was $7

BTC was on a tear – up from $0.30

He was frantically trying to mine BTC

4/ Then, on June 19, 2011 – Kevin got the opportunity of a LIFETIME

#Bitcoin CRASHED from $17 to $0.01 –– in just 20 minutes

Here’s what it looked like in real time

5/ While others were freaking out, Kevin took action.

He bid to buy $3,000 worth of #Bitcoin.

The price? $0.0101

6/ Kevin bought 259,684 BTC for UNDER $3,000

When the price bounced back – it was a 166,000% gain

Here’s Kevin explaining the $5 MILLION he made

7/ But Kevin’s luck didn’t last long

The flash crash was due to an exchange hack – a hacker had stolen the coins, then sold them to crash the market.

Mt. Gox quickly announced it would "roll back" the trades.

8/ It wasn't a great time to hold your #Bitcoin on an exchange.

A week earlier, Mt. Gox. reported 25,000 BTC stolen

The exchange was now blaming THEIR OWN AUDITOR!

9/ A rollback meant all trades after the hack would be canceled – including Kevin's

Other buyers who put in legitimate orders – buying hundreds of #Bitcoin for PENNIES… saw 0 BTC balances.

They were angry and upset

10/ Now, before the roll back, Kevin made a small withdrawal

Of the 260,000 he bought, he withdrew 643 BTC – the most allowed by the exchange's own policies

This would only add to the controversy...

11/ As #Bitcoin users asked for answers, Kevin was among the few who stepped forward.

He believed his trade was legitimate.

He went on a web TV show to defend himself.

12/ In Kevin’s mind, he wasn’t responsible for his exchange’s security.

Mt. Gox never refunded any individuals who were hacked

He thought a rollback set a dangerous precedent.

13/ #Bitcoin users were torn

Many thought that Kevin was the Mt. Gox. hacker

They called him a thief

14/ Others defended him and urged him to call a lawyer.

Some claimed Kevin had stepped up…

One user called him a “hero”

15/ Lawyers advised Kevin to sue Mt. Gox.

But he pushed back. He didn't want to tank the Bitcoin economy.

He put Bitcoin over his own personal profit 👏

16/ The debate centered around one key idea

Should exchanges be held to the same standards as Bitcoin?

Unfortunately, most don't give users any rights to their coins – here's @Nneuman explaining the dangers

17/ Ultimately, Mt. Gox would do what was in its best interest – erasing all the trades.

Kevin lost 259,360 #Bitcoin

But he learned a valuable lesson – never leave your coins on an exchange

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