Paul Vernon was once the owner of a fast-growing cryptocurrency exchange. Today, he is a fugitive, accused of stealing over $1 billion in Bitcoin. Here’s his shocking story.
Early Life and Struggles
Paul joined the U.S. Army in 1994. That’s where he met his wife, Lori Ann. He was an entrepreneur and started businesses like OnTime Online, a web hosting company, and DVD Barn, a competitor to Netflix.
Unfortunately, none of these businesses were successful. By 2010, Paul and Lori had financial problems and filed for bankruptcy.
Entering the Crypto World
In 2011, Paul started mining Bitcoin when it was only $10 per coin. He also mined other cryptocurrencies like Litecoin and Feathercoin.
Then, he had a big idea. Most crypto exchanges at the time only traded Bitcoin. Paul saw an opportunity and created Cryptsy, an exchange that supported many altcoins.
Cryptsy’s Rapid Growth
By 2014, Cryptsy had 200,000 customers and listed 130 different cryptocurrencies. Traders were making over 33,000 transactions per day.
That same year, Mt. Gox, the world’s largest Bitcoin exchange, collapsed. Many users moved to Cryptsy, making it even more popular.
The Problems Begin
By mid-2014, customers started facing issues with Cryptsy.
• Deposits were missing
• Trades were delayed
• Account balances showed incorrect amounts
People were getting nervous.
A group of podcasters investigated Cryptsy and found concerning signs. Paul was nervous and defensive when questioned.
By October 2014, a user sued Cryptsy, claiming Paul took 140 Bitcoin (worth $70,000 at the time). The case was settled out of court, but problems continued.
The Big Collapse
Rumors spread that U.S. government agencies like the SEC, IRS, and FinCEN were investigating Cryptsy. Paul denied everything.
Then, withdrawals were suddenly suspended.
Shortly after, Paul announced that Cryptsy had been hacked, and 13,000 Bitcoin was stolen. He asked customers for help, but he still owed them over 10,000 BTC.
Paul Vernon Disappears
Angry customers filed a class-action lawsuit against Paul.
But when lawyers tried to find him, he was gone. He had vanished from his home and office.
At the same time, his wife, Lori Ann, revealed that they were getting a divorce. She claimed Paul had run away to China with a mistress.
Investigators discovered that Paul had sold $3.3 million in Bitcoin on Coinbase and used the money to buy luxury houses and cars.
His wife was also sued because the court believed she helped Paul hide the stolen Bitcoin. She had to give up her house and jewelry.
Where Is Paul Vernon Now?
Authorities believe Paul still holds over 11,000 Bitcoin, worth over $1 billion today.
For years, investigators watched the blockchain. Then, they saw something strange — the stolen Bitcoin started moving.
Paul Vernon has not been seen since 2014. The U.S. Department of Justice considers him a wanted fugitive.
There’s even a rumor that he started a new crypto exchange called BiteBi9 under a fake name — “Bao Luo,” which is Chinese for Paul.
The Mystery Remains
No one knows where Paul Vernon is or what happened to the stolen Bitcoin.
Is he hiding somewhere, living off his stolen fortune?
Or will he eventually be caught?
Only time will tell.
The Rise and Fall of Paul Vernon: The Crypto Fugitive Who Vanished with $1 Billion was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.