The ongoing saga of the beleaguered Canadian crypto exchange, QuadrigaCX, just keeps on churning about with each new day, resulting in just one more revelation in one of the most bizarre storylines to come down the pike in quite some time. As many have already admitted, you just cannot make this stuff up. Investors out US$140 million; a CEO that dies with passwords under mysterious circumstances; a new bride that waits over a month to tell anyone that her new husband is dead, and a series of facts that only lead to consternation and thoughts that an elaborate “exit scam” is in play.
The newest news surrounding this strange tale is that Ernst & Young (E&Y), the court-appointed consultant that is trying to make sense of everything, has revealed that the missing funds are not in the exchange’s cold storage accounts after all. Gerry Cotten, the deceased, was said to be the only one with the passwords to the firm’s cold wallet system. E&Y was able to crack into one of Cotten’s laptops to access the account balances in question. The amounts had been moved back in April of 2018, except for a small amount used for transactional purposes. Cotten is said to have closed that in early December before his trip to India.
On the basis of these findings, the bankruptcy trustee granted another 45-day extension to allow time to locate the missing millions, but there is more. E&Y also detected at least 14 suspicious accounts that had been set up outside the normal exchange protocols and that had a series of transfers and withdrawals to non-QuadrigaCX addresses. The consulting firm is in the process of analyzing transaction histories and will make another report in the future. News did break a few weeks back that the exchange was known to deal with shady customers from time to time. Local banks wanted nothing to do with the firm due to the potential for a money laundering scandal.
As for the angry customer base of the shuttered exchange, they are not buying into any of the so-called accepted storyline of facts. Per one disgruntled account: “Cotten is having financial troubles at his company, so he travels to India to work on an orphanage? While suffering from Crohn’s he decided to go to India? Gets married and sets up a will within a month of his “death.” Manages to set up a plan ($100k) for his two dogs so that they’re taken care of. Doesn’t think to make sure the nearly $200m his exchange watches is also taken care of.”
There has also been another account that Cotten, age 30, was actually on his honeymoon, while traveling the Indian landscape. His widow claims that he died in an Indian hospital bed from serious complications with Crohn’s disease. Skeptics are demanding that there be an inquest and an official autopsy performed on the body, if there is one. Was he cremated? One doubter also noted that the region where Cotten met his demise is also known for faking deaths, as long as a few palms are greased, just one more bizarre twist in this made for Hollywood screenplay.
In the meantime, quite a few irate customers are out significant amounts of money, still believed to be roughly CAN$190 million. One enraged customer actually put up a $100,000 reward, payable to anyone that finds the missing loot. In that regard, a research firm by the name of ZeroNonCense has reviewed blockchain histories and believes that much of the missing funds resides at account addresses for QuadrigaCX maintained at various crypto exchanges, including Kraken, Bitfinex and Poloniex. Family and staff were unaware of these developments, as well, but it opens the possibility that the funds could be recovered, as long as hackers have not emptied those addresses.
Is Gerry Cotten alive and well and enjoying the large life on some secluded beach? Stay tuned, because, this story still has a ways to go.