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QuadrigaCX's Crypto Accounts Were Emptied Months Before CEO's Mysterious Death, Putting Fate of $137 Million In Doubt (businessinsider.com)
An anonymous reader quotes a report from Business Insider: Millions of dollars were missing when the CEO of a crypto exchange died without sharing the passwords to his accounts. Investigators recently cracked his laptop -- only to find the money was gone. Gerald Cotten, the founder of QuadrigaCX, was thought to have had sole access to the funds and coins exchanged on it. After his death in December, his colleagues said that about $137 million in cryptocurrency belonging to about 115,000 customers was held offline in "cold storage" and inaccessible. The case has sparked numerous theories, including that Cotten faked his own death and ran off with the cash. A court-appointed auditor, Ernst & Young, was able to crack Cotten's laptop and found that the accounts were emptied in April, eight months before his death, it said in a report last week.
The investigators said they found other issues too, such as that Quadriga kept "limited books and records" and never reported its financials. Ernst & Young also said it found 14 user accounts linked to Cotten that traded on Quadriga's exchange and withdrew cryptocurrency to addresses not tied to Quadriga. Burdened with $190 million in debt and unable to find or access the money, Quadriga filed for creditor protection in late January. A Nova Scotia court threw the company a lifeline this week, granting it a 45-day extension that prevents creditors from filing lawsuits against it until mid-April.
The investigators said they found other issues too, such as that Quadriga kept "limited books and records" and never reported its financials. Ernst & Young also said it found 14 user accounts linked to Cotten that traded on Quadriga's exchange and withdrew cryptocurrency to addresses not tied to Quadriga. Burdened with $190 million in debt and unable to find or access the money, Quadriga filed for creditor protection in late January. A Nova Scotia court threw the company a lifeline this week, granting it a 45-day extension that prevents creditors from filing lawsuits against it until mid-April.
"So, you decided to invest in fake crypto-crime money and trusted it's safe keeping with a stranger..."
First
That cryptocurrency is fools gold
Don't throw money into this that you cannot lose because you will.
Corporatism != Free Market
See how much better off you are converting your life savings into an online hoarding token whose value changes daily, and then entrusting your hoard to an AC on the Internet.
There's a job waiting for you: Finance Minister of Venezuela.
The rest of them are likely involved too. Since there is no way that company could run if all transactions had to be done via its CEO and the CEO leaves for India, and nobody raises a red flag, and somehow the company can continue to run without access to its funds, and no financial books, and so on.... lots of red flags with the whole operation.
He'll be found and arrested soon enough. He won't be dead, and won't be in India. He'll be in Canada or the USA not far from his wife.
When I RFTA, I see that Cotton died in India - how was this verified?
If I were an investor, I would want DNA proof that he was dead otherwise, I would think Interpol should be notified to start looking for him.
$137M disappears eight months before the only person with the password dies?
It could be criminally inept business practices or just simply criminal. I would look at the latter scenario.
Mimetics Inc. Twitter
It seems that the primary function of cryto-currencies is to make bank robberies easier to do and more difficult to trace.
you will get it all back. Trust in Trump! And put more in. Put it all in. Do it. Do it now!
Yeah, I wouldn't believe this guy is dead unless I saw the body, took a tissue sample myself and verified the DNA. A body alone wouldn't be enough, and a smudge of DNA sans body wouldn't be enough either.
One possibility is that he stole it, spent/gambled/lost it, committed suicide and then tried to make his death look like a non-suicide for societal or insurance reasons. The other possibility is that he's alive and well living off 100+ million bucks somewhere. Maybe he was trying to do this but got killed by some criminal element in India. We'll probably know the whole story eventually. Once competent investigators start to trace the money, they can find virtually anything, anywhere.
FDIC is a good thing
The names change but the game is the same.
"QuadrigaCX's Crypto Accounts Were Emptied Months Before CEO's Mysterious Death, Putting Fate of $137 Million In Doubt"
I have no doubt as to what happened to it.
Just cruising through this digital world at 33 1/3 rpm...
the company was $190 million in debt, and the bulk of the accounts totaling $137 million is now missing.
what was Gerald Cotten business model, I want in, he ain’t dead, he is living it up on a Caribbean island looking over his shoulder every five seconds.
While holding the password to the wallet ?
Sounds like time to take out the handcuffs and start looking at murder charges real closely.
Can someone explain how the 8 months old "withdrawal" is only seen now and required hacking the computer.
Isn't the point of the blockchain you can trace (except through mixers or specific ZKP systems) transactions precisely because every node holds an exact and full copy of the ledger of transactions?
The only thing hacking the computer could provide is private keys to actually transfer value out of those wallets but the balance should have been public.
... probably couldn't get laid for that amount of money.
He can afford a new wife, but his existing wife identified the body (and went with him to India to set up an orphanage), meaning she is involved.
To get a doctor to sign a death certificate would require a lot of money, so they should go investigate the doctor who signed off and submitted the paperwork to the Indian government.
This will all likely fall apart soon.
Is it just me or shouldn't "death" be in quotes.?
So you might be wondering how does one make $115 Million just vanish. First I'll assume they already have ruled out the obvious that it's just spent on lavish lifestyles or sitting in the accounts of the executives.
So where did it go? I speculate it never existed. How? Well imagine this, someone invests $1000 in the exchange when bitcoin is $1/coin. The exchange runner, steals all of it, but continues to tell the client that they own 1000 bitcoins. The the price of bit coin goes up 1000 fold. That 1000 coins now shows as a deposit worth $1million. If they withdraw some of it, well in the usual Ponzi fashion that money comes from the new deposits not from held funds since they don't exist.
That is there is nothing backing that $1 miillion dollars aside from the $1000 that was stolen. the $1000 did not appreciate because it wasn't ever converted to bitcoin.
So my guess is that some of this does exist in the accounts of the corrupt execs, but most of it doesn't exist at all. it's just $115M on paper, not in any account anywhere. Not $115 million stolen, its tens of thousands or hundreds stolen. If they go looking for these smaller amounts they may find some of it in boats and homes.
The interesting thing is what happens next. Clawbacks. If anyone cashed out of the exchange and it indeed was a pnozi operations then the bankruptcy lawyers will try to claw back the money from the people who unwittingly received a profit because they had the good luck to cash out. Now bad luck.
Some drink at the fountain of knowledge. Others just gargle.
Can you imagine... entrusting 137 million dollars to a hard drive that might stand a 5% chance of failing in a given year?
It sounds like this man was planning to fake his own death & disappear. Are they sure, I mean REALLY REALLY sure, that he's dead & not living it up in the Bahamas?
Here's the relevant part of the summary:
It seems it should be easy to tell from the public blockchain where the coins were transferred to, how many, and when....
The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
This was too big to display well on mobile
No, this is 'real money' not fake paper trails. By real money, coins on the exchange worth that value in dollars really existed and had leigitmate traces.
Many people (look up in google new) have been bitten, one notorious idiot from SF moving to china as reported here lost 500,000 by himself.
I believe in currencies, say someone stole a bag of say $100 bills and if the bank/govt knows the sequence numbers, it can theoretically invalidate those numbers. I think a crypto-currency will have some form of identifier/sequence-number that you could mark it as dead and remove it from circulation. Not an expert on how crypto currency works but if it doesn't have this capability, I guess it's a serious design flaw. As anyone can steal and run-away and the majority can't do anything but just look.
I know, but you still get to see more than half of it which is close enough.
That guy must have been pretty clever to arrange for three skyscrapers to get destroyed and have two airplanes crash into them just to collect insurance money. And no one figured it out, except for you! You must be REALLY clever. It also must have been a little harder than you crashing your pickup truck into Billy Bobs barn and calling Geico.
Nevermind, it looks terrible. Must have been the or
or or tags this time.
Thanks for mentioning the term "clawback" in this context; I learnt something interesting tonight.
For anyone else interested, a couple of articles that go into further detail:
Clawback Lawsuits on Rise in Aftermath of Ponzi Schemes
Ponzi Scheme Victims May Owe Triple Damages For Usury In Clawback Lawsuits - A New Tool In Ponzi Scheme Litigation?
anyone have a photo of the guy? is there a reward for his capture?
Cryptocurrency exchanges make money from customers keep buying & selling!!!
Consider that, all cryptocurrencies are down a lot & stuck @ really low prices!!!
So, realize, almost all customers are just keep waiting, because they do not want to sell for a huge loss!!!
(& most customers would not want to keep buying either, because of fear of keep increasing their losses!!!)
So, realize, almost all cryptocurrency exchange companies must be doing really bad!!!
So, realize, they each will have 2 choices, sooner or later:
Declare bankruptcy, or, runaway w/ all customer money!!!
@HODLers:
SELL ASAP!!!
Go into building rockets or invest in a Trump casino.
Have we seen his body, and has whatever we've seen been proved to be him?
-Styopa
You lame conspiracy theorists are always missing the obvious. There were FOUR airplanes hijacked, not just TWO. Two of them were crashed into buildings in NYC, yes, but that was just a distraction from the real goal, and that has worked to fool all of the clueless people willing to bite at the first worm dangling in front of them. One plane crashed into the Pentagon, but that was also a DISTRACTION. Everybody forgets about the FOURTH AIRPLANE. That airplane crashed into a farm field. Yes, a FARM FIELD, full of unharvested crops that were quickly DECLINING in VALUE. Clearly, the entire scheme was planned by the FARMER to collect insurance payments for his ruined CROPS!!! Why does nobody but me see this?
This prose is pure, unadulterated, snotty-nosed imbecility.
Imagine the botched Apollo 13 stir had happened instead on Apollo 8.
Apollo 8
And then mission control radios up: "hey, we found a way to add another 24 hours to your failed main oxygen supply." But, sorry, they didn't find a way for the astronauts to live inside the Lunar Module Test Article, leaving them up the lifeline without a paddle.
That hoary "lifeline" cliche is less serviceable here than a boomerang on Loonie Tunes.
You are assuming the deposited money was put into bitcoin. What if no crypto currencies were purchased with the deposit?
We'll just ignore the videos of Osama gloating that it had gone better than he expected. He expected to top of the towers to be destroyed, not the entire WTC.
Yeah, well, it's hard to believe much else since the whole story seems a little hard to believe.
So, a guy who was supposedly the sole person who could access the funds because they were allegedly offline ... he up and dies in India and we are to take a death certificate at face value ... it turns out months before he died that cryptocurrency was already not where people claimed it was ... and that their records were limited.
So much of this strains credibility for me, and it is hard to not see anything other than "shady CEO of cryptocurrency company dies under mysterious circumstances and we discover most everything they said was a lie".
If he wasn't shady, he was completely fucking incompetent.
Welcome to your unregulated financial markets, people .. if you don't believe this guy is sitting on a beach somewhere, well, I have a cryptocurrency venture I'd like you to invest in.
Me, I'd say someone stole all of the money and faked their own death.
As someone who has been pointing out that cryptocurrency exchanges are completely unregulated financial markets with as much assurances as from a loan shark ... I still find this shit funny.
He's living in a extraditable country with a tropical climate where they serve drinks with little umbrellas in them while earning 8%.
No, this is 'real money' not fake paper trails.
No, it's far, far too early to say that. Some selections from the reporting and the Monitor's last report to the court:
"The investigators said they found other issues too, such as that Quadriga kept "limited books and records" and never reported its financials."
"To date, the Applicants have been unable to identify a reason why Quadriga may have stopped using the Identified Bitcoin Cold Wallets for deposits in April 2018, however, the Monitor and Management will continue to review the Quadriga database to obtain further information."
"The Monitor was further advised that deposits into certain of the Identified Accounts may have been artificially created and subsequently used for trading on the Quadriga platform."
"The Monitor needs further time to analyze the transactional history of the Identified Accounts to determine whether additional Identified Accounts exist, whether the deposits into the Identified Accounts were in fact artificial, how the accounts were used, the extent of net withdrawals from the Quadriga reserves and whether recipients of withdrawals can be idenified."
Point being, a forensic financial expert is telling a Canadian court that they have no idea what's real and what isn't, and that there are shoddy records to boot. If you're saying that depositors put real money in, well, of course they did- otherwise there'd have been nothing to go missing/stolen.
CLEARLY Steve was there to pay Trump not to kill his close personal friend Arthur Porter witha drone strike (8000+ in the last two years.. #freedumbs). Dirty hundreds in a briefcase just like Lying Brian Mulrooney.
Take that rich man's cock out of yourmouth and stop 1 party rule of Canada.
We'll just ignore the videos of Osama gloating that it had gone better than he expected. He expected to top of the towers to be destroyed, not the entire WTC.
yeah because in this fantasy world you live in, it is impossible to fake video. i mean a quick google search shows barak obama and george bush having conversations on video that they never ever had in real life. but you already knew this and just want to act smart.
It isn't real if I close my eyes and say it's fake.
Not if he's laundering the money which it looks like he was trying to do. As they found MULITIPLE accounts tied to him.
IDK why they modded you down that was hilarious. Slashdot should have a +1 Funny Troll at least to to offset the -1 Stupid Troll we currently have. Its only fair right? Have to be fair.
You sir are a Geneii. That's plural for Genius, because you have to be like 2 or 3 geniuses to figure that shit out. Good job, now we can serve justice!
pfft I dont even have to close my eyes!
"+1 Troll" would definitely be a great addition, as would "-1 Funny." These labels can have wildly different connotations depending on context.
So my guess is that some of this does exist in the accounts of the corrupt execs, but most of it doesn't exist at all. it's just $115M on paper, not in any account anywhere. Not $115 million stolen, its tens of thousands or hundreds stolen. If they go looking for these smaller amounts they may find some of it in boats and homes.
Close. It was actually airplanes and houses.
So you might be wondering how does one make $115 Million just vanish. First I'll assume they already have ruled out the obvious that it's just spent on lavish lifestyles or sitting in the accounts of the executives.
So where did it go? I speculate it never existed.
I assume that you don't have much knowledge of blockchain technologies, because this doesn't really make sense.
In any exchange I've had an account on (to be clear: I'm not a crypto investor, but I opened up a few accounts to learn smart contract programming for a job I had at the time), the address of your account it made known to you. You can go onto a public blockchain explorer and see exactly what is associated with the account. That's actually kind of the point of the blockchain. Hell, I'f I've ever sent or received to your account I can know exactly how much you have.
If what you said happened happened, people were kind of foolish to event put money into the accounts -- after all, why use a totally non-transparent company to participate in a totally transparent technology?
Now, it's absolutely foolish to leave a bunch of crypto in an exchange account, seeing how the exchange has the keys to it. You can transfer money into and out of it for trivial charges, and should only keep in the account what you are planning on immediately trading. Yes, it can be a little complicated to create a key pair and set up a client on your own, but if you're too lazy to do that, you should probably reconsider your fitness to trade crypto.