In the wake of recent events involving the untimely demise of the CEO of Quadriga Cx, Gerald Cotten, and the loss of access to the digital assets worth a million dollars, the controversy surrounding Quadriga has exacerbated. From questioning the integrity of the company and the accuracy of the reported assets to speculating Cotten may have staged his own death, the conspiracy theories are running wild.
Assets lost or missing?
Reportedly, Cotten’s death has rendered C$190 million ($145 million) in Bitcoin and other digital assets irretrievable. The affidavit claims that Quadriga has effectively lost the access to 26,500 BTC, 11,000 Bitcoin Cash, 11,000 Bitcoin SV, 35,000 Bitcoin Gold, 200,000 Litecoin, and 430,000 Ethereum.
James Edwards, the editor of Zerononcense, a data analyzer and a researcher took to twitter to debunk a few obscure aspects of the case; revealing that the exchange hasn’t just lost the access to the funds, here’s the rub: it never had any in the first place and the reported BTC sum too; inaccurate. He further reveals the use of fractional reserves by Quadriga, relying on client deposits to issue withdrawals.
3/ It also appears that QuadrigaCX was using deposits from their customers to pay other customers once they requested their withdrawals – explaining crypto withdrawal delays at times. This phenomenon became much more frequent toward the end of ’18.
— CryptoMedication (@ProofofResearch) February 3, 2019
Another industry insider, Jesse Powell, the chief executive of crypto exchange Kraken, too expressed his skepticism regarding the Quadriga Saga on Twitter:
We have thousands of wallet addresses known to belong to @QuadrigaCoinEx and are investigating the bizarre and, frankly, unbelievable story of the founder’s death and lost keys. I’m not normally calling for subpoenas but if @rcmpgrcpolice are looking in to this, contact @krakenfx
— Jesse Powell (@jespow) February 3, 2019
The Premonition of death?
The court documents suggest that the CEO of Quadriga CX, Cotten, filed a will 12 days before his death. Yes, he signed his last will and testament on Nov. 27, 2018. Cotten, 30 yr old died December 9, 12 days after filing his own will, which delineates that his wife, Jennifer Robertson, be made the executor of his estate as well the owner of all the substantial assets he held, including properties in Nova Scotia and in Kelowna, British Columbia, a 2017 Lexus, an airplane, a Jeanneau 51 yacht plus his frequent flier points and reward points too, will belong to Robertson, the documents show.
Now if Cotten casually decided to update his own will before travelling or did so probably after he had a premonition of his death, should he not have ascertained somebody (probably his wife or an attorney) had access to significant assets in case of a tragedy?
Despite a lack of traces on Cottens digital life, his LinkedIn profile appears to be ‘no longer active’ which bolsters the hunch that someone has the access after all. If yes, what else do they have access to?
Death or Exit Scam?
If this wasn’t fishy enough as it is, Mrs Jennifer Robertson has been all fifty kinds of shady about it. For starters, the time it took for her to make the announcement after the death of the CEO and the simultaneous decline of the exchange is suspicious on every level. The exchange falls short on funds? Owner dies? Assets missing?
Jesse Powell, the Kraken CEO, highlights an association between the circumstances surrounding Cotten’s death, the increasing withdrawal demand and fiat issues.
There wasn’t a plan because no coins left to save OR there was a plan and the plan absconded with the keys and made up a story about a laptop. Either way, highly suspect heavy mixing of coins on @QuadrigaCoinEx wallets and still no cold storage found. So, who is missing lately?
— Jesse Powell (@jespow) February 8, 2019
Too perfect to be true, right?
Quadriga CX has previously faced legal trouble back in January 2018 when the Canadian Imperial Bank of Commerce ceased around $25.7 million of QuadrigaCX funds kept in the account of a third party processor. CIBC claims that despite carrying out an investigation it was unable to resolve the matter. In court documents CIBC stated, “It was unable to determine who the owner of the funds was.”
Within January, Robertson took out collateral mortgages on four of their properties worth a combined 1.1 million in U.S dollars in Nova Scotia in favor of a trust and finally transferred the ownership of two to a trust. Braxter, partner at McInnes Cooper in Halifax claims that transferring properties to a trust basically nullifies collateral mortgages.
Unfortunate events or an Exit scam? Well, we can’t say since new details of the case are surfacing
every minute as efforts are being made to unravel the mystery!