- Ontario Securities Commission has published the reports of the investigation of the downfall of QuadrigaCX.
- Ill luck befell the exchange when the CEO, Cotten, died suddenly on his voyage to India in December 2018.
- The reports were about the laundering and the deceptive activities of the CEO, Cotten resulted in the bankruptcy of exchange.
Recently. The Ontario Securities Commission has published reports of the investigation of the downfall of QuadrigaCX.
The Journey of QuadrigaCX
QuadrigaCX exchange launched in the year of 2018, based in Canada. It is a cryptocurrency exchange led by Gerald Cotten. Soon after, it paced the competition and became the top crypto exchange in entire Canada. The Canadian Imperial Bank of Commerce had to freeze the QuadrigaCX funds worth 30 million dollars because it failed to identify its valid owner. This resulted in a steep downfall of QuadrigaCX’s transaction volumes.
Ill luck befell the exchange when the CEO, Cotten, died suddenly on his voyage to India in December 2018. Unfortunately, Cotten was the only person who owned the security passcode to all the digital assets of its customers. Owing to this, the customers met failure to access their 26000 Bitcoins, 11000 Bitcoin Cash, 11000 Bitcoin SVG, 200000 Litecoin, and 400000 Ether in possession by QuadrigaCX.
The Purpose Behind The Report
It was the steep downfall of Quadriga due to which the Ontarians had to suffer. The OSC declared that it would investigate the matter. Moreover, the reports were about the laundering and deceptive activities, which resulted in the bankruptcy of the exchange.
The failure of the exchange had incurred a total loss amounting to $169 million, which involves tens of thousands of investigators. Out of the total number of users, 40% were Ontarians. However, after getting into the depth of data of 368000 user accounts, the OSC found details of previous users and showed fake balances. Here is a brief detail of what happened to funds, according to the report:
- Assets recovered and identified by the trustee – 46 million USD.
- Trading losses sustained by Cotten on the Quadriga – 113 million USD.
- Sustained Trading losses on external platforms- 28 million USD.
- Client funds misappropriated for living and travel purposes – 2 million USD.
- Estimated operation losses – 1 million USD.
- A total of 23 million USD for the fees paid to external platforms, income, and personal expenses.
When the prices of digital assets changed, Cotten compensated for the loss by using other users’ deposits. Hence, OSC in the report confirmed it as an effective Ponzi scheme.