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The Dark Tale of QuadrigaCX $190 Million Cryptocurrency Exchange Scandal

It all happened on the sly and had revealed when the whole thing is out of the hands of people. It was not only the story of reality but how the reality got warped immensely and smartly. Canada’s Big Crypt Exchange QuadrigaCX lost control over $190 million of its customers after the death of its founder, Gerald Cotten. It was subsequently revealed that the Cotten is the only holder of private keys, which means that the entire Cryptocurrency is lost.

On 14th January 2019, Jennifer Robertson, posted on the exchange site, informing people that his husband had died due to complications with Crohn’s disease, and this became a matter of inspection, as it is really impossible for a person of that age to die with any Crohn’s disease. Cotten and her wife flew to India for their honeymoon on 30th January and 10 days later, on 8th December 2018, Cotten was admitted to Fortis Escorts Hospital, Jaipur, suffered from vomiting, watery stools, and aching abdominal pain. The embalmer refused to consider the case because the body did not come from the hospital. The case was taken over by the Second Embalmer because he was not so conscientious and accepted the job, and then the body was sent back to the hotel with a certificate written with the wrong surname “Cotton”. After Robertson received the certificate that he can take the body home, the funeral took place in Halifax, Canada, on 12th December, and the testimony to Kraken stock exchange for the investigation of the case.

Interestingly, Quadriga CIBC (Canadian Imperial Bank of Commerce) bank has frozen its accounts in excess of 20 million by the start of 2018, which is why customers struggled with long delays in downloading Fiat money. The CIBC then tried to talk to CEO Gerald Cotten, but he refused to communicate with the bank, literally a week before Cotten’s death, when the court ordered the QuadrigaCX to be unfrozen. Quadriga then said that all pending customer withdrawals would be completed by the end of the week, but that did not happen.

The Canadian news site Globe and Mail reported that Mr. Cotten had worked hard in other areas of his life and had signed a Will on 27th November, less than two weeks before he died when he appointed Miss Robertson, he had married, a contractor for his property and outlined the distribution of his assets. As far as cold storage is concerned, the article of 2015 shows the opposite as said by Gerald Cotten. He said that Quadriga used multiple keys to store the Cryptocurrency in exchange that would make sense for any such size. If Cotten’s key died with him, why not the Cryptocurrency be released through the other two keys.

More interrogations emerged as Quadriga fails to reveal their addresses for cold storage wallets, making it difficult for the public to track any potential movement of funds, but that does not stop people from analyzing the chain where a Reddit user claims managed to track Litecoin cold storage and found that the funds were being moved. This would mean that private keys are not actually lost and they all play.

Also, another co-founder of QuadrigaCX, Michael Patryn was the founder of Blockchain’s first Incubator in Canada, the FIntech Ventures Group, and had been an advisor on numerous Crypto-related projects before meeting Cotten online and moving to Canada to start work in the exchange. According to a report by The Globe and Mail, Patryn may be a pseudonym for Omar Dhanani, a criminal convicted of money laundering charges for his role in a criminal organization known as ‘ShadowCrew’. Dhanani spent 19 months in prison for credit fraud. Patryn denied that he was Omar Dhanani. According to public comment, he left the exchange three years ago. Also, after Cotten’s death, on 26th January, the exchange site was closed, and on 27th January, Robertson quickly organized a shareholders’ meeting to appoint her, his father and a man named Jack Martel as new directors of the exchange. However, Martel resigned from the board of QuadrigaCX on 11th February.

One more strange fact about Quadriga is that Alex Hanin, the chief architect of QuadrigaCX being the only contractor on the stock exchange. It can also be called misconduct and improper management. Powell, from Kraken, also said Quadriga made backups every hour as it would potentially miss an hour’s transaction if the exchange collapses down before.

On 29th January, Robertson took out the name of four of the property of Cotten and transferred two of them to a newly created trust to which she was a trustee. On 5th February, the court-appointed Ernst & Young to oversee the proceedings. All the Cryptocurrencies were transferred to Ernst and Young. Ernst and Young revealed the fact on 1st March that the cold storage was empty.

Who knows what the truth is? With changing circumstances, one by one, with an enigmatic death and no relevant fact of the Cryptocurrency lost. The most significant questions about QuadrigaCX were, is Cotten dead, and if so, how did he die? Where is the $190 million worth of Cryptocurrency? The foremost thing to aspect is that QuadrigaCX was in economic strain but there is also rumor that the exchange was used for money laundering. It’s also possible that the entire thing was just improper management. Whatsoever must be the fact, it has become challenging for people to trust the Cryptocurrency exchange, and a huge amount of breakdown seen in the people putting their money into the exchange and trusting the new digital economy.

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About Anushree Goswami

Anushree Goswami is a Content Writer and has interest in Blockchain Technology. She has been working in the field of content writing for more than 2 years and is passionate to know and learn about new technologies.

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