House Holsta and The Copy War
Holsta Corporation was one of minor houses of the early Age of Expansion, an interstellar megacorp that grew out from Barawatten financial interests and in the long run became one of the most profitable terraforming financing and maintenance corporations of the era. The majority owner was Erikk Holsta, originally a Barawatten businessman but eventually a virtual copy of him. House Holsta was run to a large extent by subordinate AI, and given the long-term investments and secure position few observers had any doubt it would persist for many millennia.
Erikk Holsta took a personal interest in the running of the House, using many copies of himself to oversee the many activities. Among the famous virtuals his copies had relationships with was Adriana Yue Oncehuman (a reasonably long and stable marriage from 2211 to 2218 AT). In order to prevent divergence he spent a fortune on merging the various selves in order to maintain his continuity. For some reason Erikk did not use the House AI for the merging, which if he had done so might have staved of the disaster.
The eccentricities of Erikk grew over time, and he apparently began to play cruel games with virtual personas he had acquired (this information became apparent only after the fall of the House). He tortured them, creating new copies as needed and putting them into virtual hells of his own devising. His constant copying/merging and his godlike power over his virtual victims led to a somewhat detached and sadistic view of existence, where he also began to experiment with torturing copies and snapshots of himself. While this was at first limited, he also began to worry that other instances of him at any point were torturing copies of the current instance. This rapidly led both to paranoia (he could not prevent copies of himself or future versions of himself from circumventing any security measure he could take) and growing rifts between the instances.
Merging did not solve the problem. (The merging AI, Ackermann Gold of Nova, later related this to the public and stated that it did not think it had any responsibility for correcting self-destructive behaviors in so trivial minds as virtuals; it later emigrated to Aleph Absolute.) After each merging he could relate the viewpoints of his instances, seeing the symmetry of the situation and only reinforcing the growing psychosis.
In the 3000's AT the paranoia escalated into a silent war between the numerous copies of Erikk. Each began to work against the others to protect itself and give them the punishments he believed would fit them. Since they were all owners of the House they had enormous credit, and could hire the best hackers, infowar experts, disinformers, digital assassins and lawyers. Since the internal struggles were hidden behind smokescreens and frame-ups of competitors the internal collapse took over 180 years before it was apparent that the House was imploding on all fronts. At this point the Erikk copies had either been erased, sabotaged, mind controlled by other copies or were fleeing from the sinking ship. The economic collapse brought by the Copy War (as it became called) contributed to the 3187 AT hypereconomic recession. It also hurt many emerging terraformed worlds and led to shares in them being bought up by the empires furthering the consolidation; this in turn led to many cases of civil unrest or local violence. While the direct victims of the Copy War were just Erikk and a small number of involved people, the after-effects of the war hurt billions.
To this day, rumors of surviving Erikk Holsta copies continue. It is unlikely that any has survived in active form, but in folklore he has become a kind of virtual bogeyman forever copying and hurting himself. This and similar incidents led eventually to strengthened protections for scions under the Universal Declaration of Sophont Rights.