Cryptocurrency is still a relatively new and, for some, definitely confusing new technology, but the story of QuadrigaCX (QCX), the now notorious Canadian exchange, is a real life tall tale for the ages. Back in March, it was reported that the company couldn’t pay back most of their clients’ $190 million ($250 in Canadian dollars) because their 30-year-old founder, Gerald Cotten, had (by the way, allegedly) died and they couldn’t find the password to their offline storage units.
This weird story just got somehow weirder: The Wall Street Journal (via Gizmodo) claims that, based on a report by Ernst & Young last week, Cotten “took most of the money entrusted to him by clients and spent much of it on himself and his wife.”
In December, Cotton, it was claimed, died of complications from Crohn’s disease while allegedly traveling in India, where he was allegedly opening an orphanage. Later it was discovered that many of the wallets associated with QCX had been largely drained some eight months before Cotten’s death, which again remains alleged.
The Ernst & Young report claimed that Cotton “funneled client money out of Quadriga and into accounts he controlled under assumed names.” From assets that should have been worth $214 million, only $33 millio could be recovered. On top of this, the Ernst & Young report had “been unable to locate any traditional books and records, including accounting records documenting Quadriga’s financial results and operations following 2016.”
Back once more to Cotten’s possibly faked death: The report does not offer any closure one way or the other. Though it was confirmed that a Canadian had died in India, it’s not entirely certain that Canadian was Cotton. He allegedly told family members, the report said, that he may pull a “dead man’s switch,” so as to turn QCX data to them should there be an emergency. This, seemingly, never happened.
In other news, Facebook last week revealed they were starting a cryptocurrency.