QuadrigaCX: Updates to the death of the operator of Bitcoin stock exchange & suspected Ponzi scheme

the The case of the canadian Bitcoin exchange QuadrigaCX to threw in the past week, some of the questions. The suddenly deceased CEO Gerald "Gerry" Cotten, apparently, took an important secret to his grave: the Private key for the crypto, the user currencies. Now considerable doubt as to whether there were these Private Keys, or the Cold Wallet ever, and whether Cotten is dead. In addition, there is evidence to suggest that the Management of the exchange has operated a snow-ball system.

By Phillip Horch
8. February 2019BTC$3.493,55 2.48%part Facebook Twitter LinkedIn xing mail

The death of Gerald "Gerry" Cotten left behind in addition to a widow (Jennifer Robertson) and two Chihuahuas (Nitro and Gully) some serious questions. The most urgent is, and remains, the according to the Private Keys. Because Cotten to, apparently, have sole access to these, and the Only control on the stock exchange, the stored crypto-currencies. With these Private Keys, he, in turn, had the opportunity to open to the Cold Wallets of QuadrigaCX. Through his death, any kind of access to these seemed so lost. This means, ultimately, the loss of Bitcoin, Litecoin, Ethereum and other Cryptocurrencies in the value of about 144 million US dollars. The latest findings show that there was never a Cold Wallet, also doubts as to the authenticity of the death of Gerald "Gerry" Cotten.

Crohn's disease, an Indian town, and the last will

These doubts are not completely unfounded. So, it was first known that "Gerry" wrote shortly before his death his last will and his wife all the legacies overwrote. This happened on the 27. November 2018. The will he wrote in a private hospital in Jaipur, India, the same city in which he was to two weeks later, die. The Region is known for good money on fake death certificates to issue. Nevertheless: Gerry Cotten suffered from Crohn's disease, a disease that can lead to death, and was diagnosed a year after the founding of QuadrigaCX.

Now, at least, two documents have surfaced to confirm the death of Gerald Cotten. A death certificate of J. A. Snow Funeral Home, as well as an official certificate from the Indian city of Rajasthan, Dating the death of "Gerry" on the 9. December 2018. On this day, he is said to have a cardiac arrest suffered. Momentarily him to the Doctors to revive, probably, the CEO of QuadrigaCX not survived the second cardiac arrest, however, according to the documents:

in Spite of all the efforts of our Doctors, they could not revive the patient and declared him to be at 19:26 for the dead. In the treatment of patients with all the usual medical procedures and policies were adhered to. The information about his death were communicated to the competent authorities.

Whether these documents are real or not: overwrite his entire fortune to his widow and, according to the last will of "procurement, access, Modification, deletion and control of its passwords and other electronic access data".

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Thus punished his wife would have to have access to that Cold Wallet, after the stock market is looking so eagerly. But there is a lot then this is not an indication that this Laptop is full of outsourced Bitcoin, Litecoin & co. at all.

doubts as to the existence of the Cold Wallet

Kraken CEO Jesse Powell has expressed recently on Twitter his doubts as to the is Happening in and around QuadrigaCX:

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

There was no Plan, because there were no Coins OR there was a Plan and it was, with the Keys run off and invent a Story on a Laptop. However, There is a strong suspicion on a Mix of Coins on the QuadrigaCoinEx-Wallets. Furthermore, there is no Cold Storage is still always showed up. [...]

the findings of The Blockchain analyst "Proof of Research" substantiates this suspicion.

Proof-of-Research gathered his information by customers, analyzed the Wallet addresses of former QuadrigaCX -. Through the comparison of different Wallet addresses, he could make out due to the transparency of the Blockchain, some of the addresses, the Quadriga, apparently, used to store your Bitcoin, and/or to send. For this, he used the wallet Explorer Chainalysis. As a result, he was able to confirm, ultimately, that QuadrigaCX was apparently never a Wallet that served as Storage or as memory. So the conclusion is:

The most important conclusion to be drawn from the Deposit information of the customer that QuadrigaCX had more than likely never have enough BTC, in order to capture the customers funds. In the next section of the to reflect customer payment information in connection with BTC transactions on the stock exchange, QuadrigaCX redirects clearly payments from customers to meet withdrawal requests from other customers at your exchange.

Quadriga operating a Ponzi scheme

This means: According to the latest information QuadrigaCX operating a classic Ponzi scheme. Instead of the crypto-currencies, therefore, safe to store on the Laptop, were you outsourced to now unknown addresses. The means, moreover, that Quadriga CX lived only from the current liquidity and hardly on my own. Customers to pay, it would thus seem that only those deposits on crypto-currencies, the other customers had currently paid. The report also suggests that Quadriga have not lost access to the Coins. Also, the number of tokens that were actually in the possession of the stock exchange is very much less than originally, to the court specified.

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As you can see from the analysis, by the way, QuadrigaCX is currently not quiet. Apparently, the last for quite some time (?) Crypto-currencies of the exchange taken away, and your tracks through the Mixer defaced. In other words: someone "saves" most likely, the last Bitcoin, in order to protect them from any investigations.

authorities failure

Apart from that, dACE is a lot to be desired, the question arises, how could everything outside of the authorities radars to happen. Because the canadian Bitcoin exchange QuadrigaCX apparently was able to operate relatively freely. So QuadrigaCX is registered in British Colombia. However, it has no offices, Bank accounts and except for a handful of contract partners employees. The Internet address was registered in the Bahamas, on Facebook originally, listed address refers cases to rentable letter. Apparently, the stock market gave authority of British Columbia that they knew of the stock exchange since the year 2017. However, the stock market was not regulated, apparently, because they went to neither "as a place of trade or exchange" under canadian law.

As the thing also be like: The freshly unified U.S.-canadian Blockchain Federation now has its hands full.

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