Big news from the crypto world: the 104 Bitcoin linked to QuadrigaCX’s exchange now inactive since 2019 were now thought to be inaccessible. Five wallets linked to the exchange recently moved funds for the first time, worth $1.75 million. The Canadian exchange platform has now been bankrupt for more than three years.
Making the announcement was a crypto researcher, ZachXBT, who alerted his community on Twitter last night:
“On Dec. 17, five wallets attributed to QuadrigaCX suddenly moved about 104 BTC-the first movement in years.”
Some explanation will have to be given as to how it was possible to access the movement of those funds, as the cryptographic keys, belonging to the late Canadian CEO Gerald Cotten, were not accessible.
News on QuadrigaCX: What could the movement of Bitcoin on platform wallets mean?
First, there is a need to explain that QuadrigaCX, before its bankruptcy, was considered one of the largest Canadian cryptocurrency exchanges. In April 2019, the company declared bankruptcy after the company’s CEO and founder Gerald Cotten passed away.
Why the bankruptcy? Gerald Cotten was the only one able to unlock exchange wallets, that is, the only holder of the private keys needed for the action. This triggered a series of problems that put the company in crisis and with it the exchange’s customers. The company had many customers, and the loss to users of the platform is estimated to be around $200 million.
Many theories were created behind the mysterious death of the CEO and founder of QuadrigaCX, with some even thinking that Gerald Cotten faked his death, predicting the company’s bankruptcy. Many rumors still circulate in the crypto ecosystem about Cotten’s death, but what we know is only related to his company’s subsequent bankruptcy.
A report on 6 February 2019 uncovered a transfer of 103 BTC to a cold wallet to which only Gerald Cotten had access, a sum really close to the amount moved recently. This situation opens up new scenarios for the various conspiracy theories that emerged over the years.
QuadrigaCX exchange scam only discovered after Cotten’s death
Cotten’s death, in addition to raising various conspiracy theories, also unveiled several crimes committed by the CEO and founder himself. In fact, after his death and the subsequent collapse of the company, several legal problems emanated from QuadrigaCX.
Gerald Cotten exploited the legal loopholes and anonymity enabled by blockchain technology to circumvent controls. The data shown to clients about their capital was false. The CEO of Quadriga CX was making sure that he was the only one with direct access to cryptocurrencies precisely in order to be able to act undisturbed, unbeknownst even to his employees, according to Canadian authorities. Cotten, then, spent the money invested in cryptocurrencies by his clients on personal expenses and, to a lesser extent, on high-risk investments.
A classic Ponzi Scheme, with a famous pyramid structure. Clients invest their capital, thinking they are making money, when in fact the investment is steadily decreasing. Those who think they are withdrawing money are merely withdrawing money put in by new customers, until the platform becomes insolvent and it is no longer possible to withdraw funds.
The documentary on the story, “Trust No One: The Hunt for the Crypto King,” is on Netflix
For lovers of real stories and the crypto world, the affair directly concerning QuadrigaCX can be found in docuseries format right on Netflix. The story attempts to shed light on the mysterious and controversial story, with dramatic implications, Cotten’s sudden death on 9 December 2018 from complications due to Chron’s disease, which occurred in India during his honeymoon with his new wife Jennifer Robertson.
A group of scammed users became investigators trying to shed light on the CEO’s untimely death.
The QuadrigaCX affair is one of the most controversial scam stories in the crypto world, so much so that it deserved a docuseries on Netflix. Now on par with QuadrigaCX, the collapse of FTX is an equally powerful affair, full of mysteries yet to be solved and with investigations still ongoing.