Crypto exchange QuadrigaCX turned out to be a fraudulent scheme, considers regulator
Experts confirm that the QuadrigaCX exchange is a scam
Cotten spent millions dollars investors for a luxurious life
Investors demand to return them $ 300 million
International consortium news organizations, developing standards transparency.
About this Ontario Securities Commission officials report after 10-month audit of the company. because of fraudulent actions by the management of the exchange over 76,000 investors lost their of money totaling over $ 125 million.
The scam of the century succeeded
Let’s remind that cryptocurrency stock exchange QuadrigaCX crashed in 2019 year after the sudden death of its founder Gerald Cotten, who died in India during time honeymoon. The official cause of the man’s sudden death was the exacerbation of Crohn’s disease. but the death of Cotten became known only after some months. Allegedly, Indian doctors incorrectly indicated the surname of the deceased, so they could not immediately identify the body. Everything this the time the exchange accepted payments and carried out transactions of clients.
When it became known about the alleged death of Gerald Cotten, more 76 000 users could not get access to their wallets, but they are stuck on the resource money in the amount of 190 million Canadian dollars. This was due to the fact that Cotten was the sole owner of the keys to the exchange wallets. He did not transfer information with the key code to anyone, so no one could get access to the exchanger.
Later Ernst & Young revealed that after death of the founder of Quadrigacx, money from the exchanger was withdrawn to other cryptocurrency wallets and to Cotten’s personal accounts. Who could have done it, if access keys were only by Gerald himself?
The deceived users questioned Cotten’s death and demanded from the law firm Miller Thomson, which was appointed by the Supreme Court New Scotland in quality legal representative of the Quadrigacx group of clients, to exhume the body to ensure that the deceased is indeed Cotten.
In the same time company Ernst & Young who now collects claims from affected clients, registered claims from investors in the amount of $ 300 million.
Ponzi scheme in action
“Cotten opened accounts under fictitious names and attributed fictitious balances to himself currency and the cryptoassets he traded with Quadriga’s unsuspecting clients. He suffered real losses when price cryptoassets changed, themes thereby creating a deficit assets, available for withdrawal funds clients. It covered this drawback is due to deposits of other customers, “- said in a statement of the Securities Commission.
“The information presented in the report indicates the risks that may arise at use of platforms for trading cryptoassets. These risks are exacerbated when securities and derivatives trading platforms fail to register with regulators and disclose critical information about his practice “, – stated Ontario Securities Commission representative.
Deceived users all the same hope, that the Canadian court will take their side and oblige them to compensate the losses of clients. However, the lawyers themselves are confident that the proceedings can drag on for years..
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