Last year’s controversial collapse of Canadian cryptocurrency exchange QuadrigaCX has been linked to a ponzi scheme that was operated its founder Gerald Cotten, who passed away in late 2018 from Crohn’s disease.
Cotten’s sudden death meant that $190 million of customers’ funds effectively became locked up as he was the only person with access to the private keys.
A statement at the time of QuadrigaCX’s website read: “For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us.
— Oliver Knight (@KnightCoinRivet) June 12, 2020
“Unfortunately, these efforts have not been successful.”
It has now transpired that, according to Canada’s financial regulator, customers were defrauded out of funds by QuadrigaCX.
“What happened at Quadriga was an old-fashioned fraud wrapped in modern technology,” staff at the Ontario Securities Commission (OSC) stated.
“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.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.