Questions and Answers About the QuadrigaCX Crash


Last week, nearly all leading crypto news agencies published articles about the largest Canadian exchange QuadrigaCX and unclear problems related to the exchange’s CEO Gerald Cotten and his unexpected death in India. The trading platform experienced banking problems for more than a year while users weren’t able to withdraw fiat or crypto directly. The recent death of the company’s CEO and statements that only Cotten had exclusive access to the firm’s funds caused new fears that QuadrigaCX is a fraudulent project with unfair owners.

This story is full of questions, so we want to answer at least some of them. Let’s begin with things that we know for sure and then move to less clear points.

How Much Is Lost?

According to the official affidavit, users’ calculations, and Quadriga’s employees, the trading platform currently owe more than $190 million to around 110,000 clients. The Cotten’s widow Jennifer Robertson claims that neither she nor any employee knows how to access funds. By the way, QuadrigaCX should hold impressive amounts:

  • 26,500 BTC.
  • 11,000 BCH.
  • 11,000 BSV.
  • 35,000 BTG.
  • 200,000 LTC.
  • 430,000 ETH.

Not all funds were kept in crypto as about $50 million are currently held by payment processors in fiat. Nevertheless, EY (the monitoring team appointed by the court) or financial companies still haven’t found ways to endorse these drafts.

Finally, Quadriga’s lawyers have access to $5 million but this amount will be used for organizing the bankruptcy and paying for various administrative things.

How This Was Possible?

Long story short, Gerald Cotten controlled everything on his own and managed the exchange’s processes via his private encrypted laptop. His wife, Jennifer Robertson, has been unable to enter the account, so the court passed the laptop to experts who are trying to break its protection right now.

The sudden Cotten’s death of Crohn’s disease looked suspicious in combination with such a strange story of management but now we can check the death certificate issued by the local Indian authorities. Other Canadian and Indian organizations which may be responsible for documenting this death refuse to contact with the press.

At all, the story looks really unusual but currently we can’t prove or disprove it. Unsatisfied users have to wait at least one month while QuadrigaCX tries to deal with this problem.

What Quadriga Does Now?

Recently, Robertson on behalf of the exchange has filed for protection from creditors to get some time on solving issues. The Supreme Court of Nova Scotia gave the company 30 days to find missing money and return them. Crypto experts try to access the Cotten’s laptop but in the case of their failure, Robertson can even sell the entire trading platform to cover expenses and call for bankruptcy legally.

Are There Tasty Speculations?

Obviously, traders across the globe speak out their own opinions and force rumors. Among the most discussed ideas and questions, there are these examples:

  • Does QuadrigaCX have cold wallets at all? Taylor Monahan from MyCrypto accused the company of lying about cold wallets. The affidavit claims that employees can’t access them but data recorded in blockchain reveals that, at least for ETH, the exchange utilized either in-built storages or three primary hot wallets only.
  • Has the exchange implemented multi-sig wallets? Back in 2015, Cotten told that QuadrigaCX utilizes multi-signature wallets (accounts which feature several verifications from different users) for better security. But the company’s workers haven’t announced that they can access wallets. Means, Cotten could manage all signatures on his own or he just lied about multi-sig innovations.
  • Who hides behind the mask of Michael Patryn? A crypto enthusiast named Michael in the Twitter channel Boxmining claimed that his namesake Michael Patryn, co-founder of QuadigaCX, is a fake person. According to the user, actually, he’s a fraud and cybercriminal Omar Dhanani who could steal IDs of the exchange’s users.

What to Expect Further?

The official statement published on the Quadriga’s website features the most popular questions and answers. It notes that the long process is only at its beginning but the exchange will try to do the best to maximize funds available for users. Right now, we should wait and spectate for this intriguing and pretty unusual story.