Perhaps one of the biggest – and scariest – mysteries to emerge from the cryptocurrency space over the past few years has been the rise and fall of Quadriga CX, a cryptocurrency exchange in Canada that now has an undoubtedly shady history behind it.

Quadriga CX Will Probably Always Live in Infamy

At one point, Quadriga CX was one of the largest cryptocurrency trading platform in Canada, but now the company has been marred by controversy and a lot of angry people who cannot seemingly get their money back. The platform was headed by a 30-year-old man named Gerald Cotten, who passed in late 2018 in India allegedly due to complications from Chron’s Disease.

After his death, it appears that the crypto exchange suddenly locked itself up and nobody was able to gain access to customers’ money. Not the customers themselves, and not the other executives that were left to oversee the operations of Quadriga in Gerald’s absence. This was ultimately followed by the harassment of Gerald’s wife, who potentially tried to work things out with executives to make it so that the money could be accessed. Sadly, these efforts amounted to nothing.

The company is now twisted up in a major class-action suit that sees many customers trying to get their funds returned to them. It is estimated that as much as $215 million in digital funds has either been lost or cannot be accessed.

Now, for the first time in a while, someone is referring to Quadriga as a Ponzi scheme. The words come from Canada’s biggest securities regulator, and in a new report, it refers to the matter surrounding Quadriga CX as the scheme of the century. The document explains:

What happened at Quadriga was old-fashioned fraud wrapped in modern technology. While public release of an investigative report is rare, we believe the tens of thousands of Ontarians who entrusted Quadriga with their money and crypto assets deserve to know what happened.

It is strange that the private keys necessary for accessing the exchange funds were only held by one person. If anything were to happen to that person – and it seemingly did – the rest of the crypto community doing business with the exchange would not be able to continue in their positions without experiencing heavy loads of trouble.

Using Money to Cover One’s Tracks

The report suggests that Gerald Cotten used customers funds to cover past losses that the company had experienced. These losses were largely due to the massive price drops incurred by bitcoin and other leading forms of crypto in 2018. At that time, bitcoin lost more than 70 percent of its value, falling from about $20,000 per unit a year to the mid-$3,000 range.

In addition, the report also suggests that Cotten lost as much as $115 million in digital funds due to fraudulent trading practices and using the money for personal means.

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