Gerald Cotten, the CEO
QuadrigaCX was apparently controlled by one person – Gerald Cotten, the CEO, who passed away in December 2018 at the age of 30, from complications of Crohn disease. Yet, there are still rumors in the market and in the forums that he actually did not pass away but started a new life with a new identity and some USD 190 million. Conspiracy theorists are at work.
Anyway, Gerald Cotten‘s passing away forced QuadrigaCX into insolvency procedures. The company was granted relief under the Canadian Companies’ Creditors Arrangement Act (CCAA) and auditor Ernst & Young was appointed to monitor the respective proceedings. The Ernst & Young report also states that the auditors discovered 14 user accounts that may have been created “outside the normal process” by QuadrigaCX and it appears that the identified accounts were created under various aliases. Reportedly, the U.S. Federal Bureau of Investigation (FBI) is looking into the QuadrigaCX case.
On March 5, 2019, the Nova Scotia Supreme Court Justice Michael Wood granted QuadrigaCX a 45-day extension to recover the missing cryptos. The next hearing is scheduled for April 18th, before which the creditors cannot charge the exchange legally. The company had filed for creditor protection under Canadian law and has been under the respective protection since February 5th.
The judge granted an order compelling Amazon Web Services, which reportedly has QuadrigaCX platform data in an account created by Cotten, to turn over any such data. Miller Thomson and Cox & Palmer, the court-appointed representative counsel reported that 800 individuals have reached out directly to the law firms already.
The QuadrigaCX case is for sure another a blow to the reputation of the crypto industry after the many fraudulent crypto broker schemes that damaged retail investors big style. To fight for the trust of investors into the crypto space the San Francisco-headquartered exchange Kraken promised a reward of $100,000 to anyone who provided information regarding the exchange’s missing funds.
The QuadrigaCX case is far from over. On the contrary, it just started. Let’s stay tuned.