Last December, it was reported that Gerald Cotten – the head executive of Canadian cryptocurrency exchange Quadriga CX – had passed away in India from complications due to Chron’s disease while working at an orphanage. According to a recent report that has just emerged, Cotten embezzled millions of his investors’ funds before his death six months ago.
Cotten Continues to Stir Controversy
The report suggests that Cotten spent millions of his users’ money on himself and his wife. Some of the purchases he made include real estate, travel expenses, luxury goods and covering his own crypto losses. The document explains:
Significant volumes of cryptocurrency were transferred off platform outside Quadriga to competitor exchanges into personal accounts controlled by Mr. Cotten. It appears that user cryptocurrency was traded on these exchanges and, in some circumstances, used as security for a margin trading account established by Mr. Cotten. In addition, substantial amounts of cryptocurrency were transferred to wallet holders whose identity the monitor has been unable to confirm.
At press time, Quadriga CX is in the middle of class-action lawsuit brought about by several of the company’s users. When Cotten died last December, he was the only one with knowledge of the exchange’s access keys, meaning neither his wife, nor any other company executives could enter the platform to retrieve customers’ money. Lawyers representing the individuals have estimated that over $200 million in Canadian dollars are owed to approximately 76,000 persons. However, less than $33 million has been recovered.
Following his death, many users turned to Cotten’s wife Jennifer Robertson. She has since stated through an affidavit that the company’s several computers storing users’ crypto are encrypted, and that millions of dollars are likely to remain “out of reach.”
Many skeptics have suggested that Cotten faked his death as a means of walking away with all his customers’ money. While the report doesn’t confirm if this is true or false, it does show that Cotten failed to keep any appropriate records of transfers, sales and purchases that occurred through the Quadriga platform. It also shows that he transferred “large amounts of money without any oversight.”
Luxury Abound, While Customers Get Nothing
The report also suggests that during this time, Cotten and his spouse acquired real estate, along with several other significant assets while often taking several exotic vacations and utilizing the services of private jets. Quadriga CX filed for bankruptcy last February, which was ultimately granted by a high court in Nova Scotia.
At the time of writing, answers have still not been given regarding Cotten’s circumstances, and it’s hard to know who should be believed: the executives or the skeptics. If Cotten did fake his own death simply to run off with his customers’ money, it would likely be one of the biggest examples of financial fraud to occur within the space.