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Software Engineer Loses Life Savings in Quadriga Imbroglio (bloomberg.com)
Tong Zou wasn't a stereotypical crypto bro bent on accumulating flashy trophies such as Lamborghinis when he deposited his life savings into Quadriga CX's digital exchange. The 30-year-old software engineer, who'd been working in California for seven years, just wanted to save a few bucks on transfer fees after deciding to move to Vancouver. It proved to be a C$560,000 ($422,000) mistake. From a report: "It's all my savings, so I'm just living on what little I have left and trying to start over," Zou said in a phone interview Friday from Vancouver, where he has been living out of an AirBnB for the past month. "It pretty much took everything away from me." Zou is one of Quadriga's 115,000 clients who are out of luck after the sudden death of the firm's founder left C$190 million in cryptocurrencies protected by his passwords unretrievable. The exchange has halted operations and was granted protection from creditors on Feb. 5 in Nova Scotia Supreme Court in Halifax.
He wasn't letting his crypto sit on QuadrigaCX, and likely didn't have it there as crypto for any more than a few minutes. He wanted QuadrigaCX's crypto$$$ exchanges to help him buy the crypto with USD (he either deposited USD into QuadrigaCX, or first purchased crypto using USD elsewhere which he then transferred to QuadrigaCX), and sell it for CAD.. and then the idea was that QuadrigaCX would transfer his CAD (as a 'withdrawal' from QuadrigaCX) to his CAD bank account. I didn't read this particular article.. but a lot of people used QuadrigaCX specifically to convert cryptoCAD through its exchange/market. It's been assumed to be dicey for over a year though, since their withdrawals began to often take upwards of 2 months. His withdrawal, rather than just being horribly delayed, never came.
They get to learn the hard way why each discrete financial regulation we have today was enacted.
It's not like countless people have not lost money from highly regulated banks as well.
I've lost way more money on bullshit fees and predatory practices than I've ever lost through cryptocurrency. At least there I can be in some control over maintaining my own wallet if I wish.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Canada taxes based on where you live. He was a Canadian citizen living in the U.S., so not subject to Canadian taxes on the money he earned while living in the U.S. I have several Canadian friends who work in the U.S. They have to be careful to monitor the time they spend visiting Canada on vacations and such. If they began (or ended) work in the U.S. partway through the year, and their visits to Canada push them over 183 days in Canada for the year, suddenly they are a Canadian resident for the year and owe Canadian taxes on everything they made. The U.S. taxes the money anyway since it was earned in the U.S.
I went through the reverse situation (U.S. citizen working in Canada). The U.S. taxes not just based on where you earned the money, but also on citizenship. So I was subject to double-taxation. Canada taxed my income because my job was in Canada. The U.S. taxed my income because I was a U.S. citizen. The two countries have a tax treaty so I only paid the greater of the two income taxes on my wages. But the treaty only covered earned income (you can apply your Canadian earned income tax bill as a credit to your U.S. earned income tax bill). If I had lived in Canada, any unearned income - interest from a savings account, investments, sales of stock which had appreciated, etc - would've been subject to double taxation. Both countries would've made me pay taxes on it. So I ended up living just across the border in the U.S. and commuted to work in Canada, and telecommuted often enough so I never passed 183 days per year in Canada.
California was another small nightmare. California taxes based on citizenship as well, and will still try to claim you are a California citizen (resident) even if you move to another country, and will try to make you pay California taxes on everything you make abroad. To thwart them, you first have to set up residency in another state before you move abroad. Preferably a state with no income taxes so they don't try to pull the same thing. So even if I had decided to live in Canada, I would've first had to have lived in Washington state long enough to get a driver's license there to officially shed my California residency.
The fees actually aren't your biggest concern. Exchange rates are always fluctuating. When I moved most of my Canadian funds back to the U.S., I did it a little at a time over a span of a couple months. If I had transferred it all at once, I could've lost a lot of money to a transient blip in the exchange rate. That happened to the owner of the company I was working at. He panicked when the U.S. Dollar began falling in Sept-Oct 2007 and converted all of the company's U.S. funds to Canadian in early November 2007. That happened to be