Brandon Chez on Risk Management in Crypto: Early Lessons From Mt. Gox and Beyond

When cryptocurrency was still in its infancy, few people understood it well enough to build infrastructure around it. Brandon Chez, who created a major asset price-tracking platform in 2013 from his Queens apartment, has witnessed the industry’s entire evolution—from extreme volatility to mainstream adoption. His journey offers valuable insights for anyone navigating today’s crypto landscape.

How One Developer Became Fascinated With Bitcoin

Chez’s entry into cryptocurrency wasn’t planned. In 2011, while reading tech news during a lunch break, he stumbled upon an article about Bitcoin reaching price parity with the U.S. dollar. His initial reaction mirrored most people’s skepticism: this looked like a scam or Ponzi scheme. But what captured his imagination was the technology itself—an open-source system that tech professionals he trusted found legitimate.

After months of research and deliberation, he decided to take the plunge. “I’m not going to lose all my money immediately,” he reasoned, before opening an account on one of the early exchanges and trading small amounts for experience.

The Mt. Gox Disaster: A Turning Point for Self-Custody

While Chez personally avoided losses when Mt. Gox collapsed—one of the crypto industry’s earliest and most devastating hacks—he witnessed firsthand the pain experienced by thousands of affected users. This event crystallized one of his core principles: if you don’t control the private keys, you don’t truly own the cryptocurrency.

The collapse of Mt. Gox, which once handled 80-90% of Bitcoin’s trading volume, served a critical function. It forced the industry to decentralize exchange infrastructure and taught investors to diversify their holdings across multiple platforms rather than trusting a single custodian.

The Balance Between Accessibility and Risk

Years later, the crypto community would debate a familiar tension: should newcomers keep assets on exchanges, or should they manage their own private keys? This question remains relevant today, especially as institutions and retail investors continue entering the market.

Chez’s perspective is pragmatic rather than ideological. Leaving cryptocurrency on exchanges is acceptable, provided users understand the risks. The key principle is accepting personal responsibility—only depositing amounts one can afford to lose completely. He distinguishes between trading active funds (where exchange convenience is reasonable) and long-term savings (where self-custody becomes more prudent).

“Don’t put your life savings there,” he emphasizes. “Only put what you’re willing to lose in a worst-case scenario.”

How Industry Disasters Accelerated Maturity

When major scams like Bitconnect emerged, some questioned whether cryptocurrency could ever be trusted. Chez views these incidents differently—not as indictments of the technology, but as necessary evolutionary steps. Bitconnect taught investors to scrutinize unrealistic return promises and exercise caution with unfamiliar protocols. Mt. Gox taught them to question centralized custody.

Each crisis removed naive money from the system while educating survivors about risk management. The result: a more sophisticated user base that understands the technology’s possibilities without falling for its obvious pitfalls.

The Real Investment: Knowledge Over Returns

For those considering entering cryptocurrency—whether as investors or builders—Chez offers advice that cuts through the noise. The best investment isn’t in any particular token or trading strategy. It’s in yourself.

Understanding the underlying technology deeply, contributing to projects that genuinely interest you, and building real expertise creates long-term value. When blockchain technology inevitably becomes mainstream infrastructure, that accumulated knowledge and experience becomes invaluable. Those who invested in understanding the ecosystem will be positioned at the forefront of the industry.

Meanwhile, anyone promising quick fortunes should be treated with extreme skepticism. Sustainable wealth in crypto—like all wealth—comes from learning, building, and taking calculated risks.

Brandon Chez’s journey from curious technologist to industry builder illustrates that crypto’s real value lies not in speculation, but in understanding. The industry’s painful early chapters—Mt. Gox, Bitconnect, countless hacks—weren’t failures of the technology itself. They were tuition payments that taught investors to think critically, manage risk responsibly, and focus on genuine innovation rather than get-rich-quick schemes.