The past week has not been kind to blockchain entrepreneurs, whose holdings suffered the largest crypto liquidation in history last Friday, an event which wiped more than $380 billion off the market.
During the short but heavy crash, the price of Bitcoin fell 15 percent, while the second-largest cryptocurrency, Ethereum, dropped some 21 percent. The alt-coin market all but collapsed, many of them falling as much as 80 percent, raising serious doubts about the future of the broader crypto ecosystem.
Depending where you look, crypto prices are already rebounding as investors rush to hedge against another fall. But the recovering wasn’t in swing before Konstantin Ganich, a Ukrainian crypt fund manager and influencer was found dead in his Lamborghini, the victim of a gunshot wound.
Ganich, who was also known as “Kostya Kudo” on social media, was rumored to have lost anywhere from $7 million to $60 million in the crash, according to various Ukrainian media sources. Peter Korotaev, a journalist who runs the English-language blog Events in Ukraine, wrote that “much, if not most” of that money belonged to investors.
According to Korotaev, Ganich had claimed in Ukrainian-language interviews that his crypto holdings were insured for losses up to 15 percent. He added that the crypto tycoon paid investors a fixed monthly sum of 7 percent based on their buy-in, no matter how good or bad the market was doing — a classic hallmark of a crypto scam.
Police initially told news media that the 32-year-old crypto blogger died by suicide. Before his death, Ganich was reportedly depressed about the crypto crash, and sent farewell messages to love ones, per 44, a local news aggregator in Kyiv.
However, according to Ukrainian Independent News Agency (UNINA) — one of the longest-running news agencies in Ukraine — Ganich’s acquaintances allege that law enforcement bureaucrats pressured the crypto trader the night before his death, demanding a share of his income. While not confirmed by state investigators, that allegation was also raised by another news agency, Strana, which added that Ganich was likely managing funds for ranking Ukrainian government and police officials.
Those claims throw an intriguing wrench into the official story, especially given the day-to-day volatility of the crypto trade. As one of Ganich’s associates told UNINA, “if crypto people shot themselves after every market crash, they would all be lying in the ground.”
Throwing even more fuel onto the conspiracy fire, Korotaev writes, is the fact that the victim’s gun was a gift from Kyryllo Budanov, the head of Ukrainian military intelligence described by western researchers as Ukraine’s “top spymaster.” Budanov is known for perpetuating massive call center scams on behalf of the Ukrainian government, among other financial espionage.
Whether by suicide or murder, it’s not out of the realm of possibility that Ganich’s death resulted from his role in the pressure cooker that is the Ukrainian crypto scene. Despite being one of the poorest countries in Europe, Ukraine is one of the world leaders in crypto adoption, with tens of billions of dollars worth of the stuff flowing through the nation every year.
“Political and economic relations in Ukraine at the highest levels are based on corruption,” one crypto investor told Strana. “In recent years, corruption has shifted to cryptocurrency. Cryptocurrency is the main nerve center of all Ukrainian corruption right now.”
More on crypto: A Sitting President Is Making Billions Off Crypto, Which Feels Like a Bit of an Outrage