16 Jun 2020
When the founder of Canada’s largest cryptocurrency exchange died in India in 2018 he took with him the passwords to digital wallets worth more than £100 million.
Or so his 76,000 clients thought. A new watchdog report claims, however, that Gerald Cotten ran QuadrigaCX as a kind of Ponzi scheme, losing about C$115 million (about £65 million today) through “fraudulent trading”.
If the wallets are ever opened, they will probably be empty.
Cryptocurrencies, which emerged after the 2017 bitcoin boom, are digital currencies that operate independently of banks. Trades are entered into a public ledger that should be free from interference. Many initially viewed cryptocurrencies as a solid investment but their prices have been known to fluctuate wildly.
“What happened at Quadriga was an old-fashioned fraud wrapped in modern technology”, the Ontario Securities Commission (OSC), said after a ten-month investigation. “Quadriga was already in crisis before Cotten’s death.”
Cotten died aged 30 of complications from Crohn’s disease. Some customers, owed almost C$169 million, suspect that he fled with the money after faking his death, leaving Jennifer Robinson, his wife, to pick up the pieces. Lawyers for the victims asked Canadian police last year to exhume Cotten’s body to verify his death. The request has not been granted.
His clients’ wallets, some supposed to contain up to C$400,000, were held on a laptop that remains inaccessible, despite a search for papers by Ms Robinson. The OSC report reveals Cotten’s crooked management.
By Charlie Mitchell, The Times, 15 June 2020
Read more at The Times
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