QuadrigaCX’s Crypto Crisis: Recent Developments


As mentioned in a previous post, Canadian crypto-exchange QuadrigaCX’s 30-year-old founder, Gerald Cotton, unexpectedly died in December 2018, taking his sole-access to the near $190 million in client holdings with him to the grave. Cotton, in the goal of increased security, used a ‘cold storage’ method of safeguarding the password used to hold the bulk of the cryptocurrencies his company had control of. Cold storage or cold wallets are procedures that store cryptocurrencies offline, which eliminates the risk of online threats such as hacking and ransomware. However, as Gerald Cotton was the only person who knew the password to the storage (not even his wife knew), many of QuadrigaCX’s clients are unable to access their funds.

There has been mass speculation that foul play was involved (including that he faked his death), and these rumors just had fuel added to the fire. In a 70-page report published by the exchanges court-appointed monitor, it appears that Cotton siphoned money to other accounts without users’ knowledge before being reported deceased; these transactions involved large sums of customer’s money ending up in separate crypto-exchanges, all in his name or his aliases. “Between 2016 and the end of 2018, Cotten transferred 9,450 Bitcoin, 387,738 Ethereum and 239,020 Litecoin out of his exchange’s accounts” (Hochstein, 2019).

In similar cases, especially with such a large crypto-exchange, there should be proper documentation of everything, right? Sadly, for Quadriga’s customers, there is little evidence to suggest that any form of accounting records exist since at least 2016. Expensive properties, private jets, and lush vacations were all sourced from Quadriga funds, leaving Cotton’s wife, Jennifer Robertson, in possession of many luxury properties, aircraft, vehicles, cash holdings, and substantial investment securities; these assets are hoped to be liquidated and paid to the creditors’ estate.

One of the great mysteries of the tech world seems to get more interesting every day. Cotton undoubtedly used his customer’s funds without permission for his gain, stealing hundreds of millions of dollars. He and his wife declared no income from the company on his taxes, yet accumulated significant assets through the years. Quadriga, according to auditors, should currently have assets worth approximately $214 million but were only able to recover $33 million.

As more information gets released about Cotton’s (supposed) death and Quadriga’s missing funds, the more questions come to mind. Is Gerald Cotton really dead, or is he sipping a margarita on a private island right now? How did he not set up a ‘dead man’s switch’ which would ensure that his sole key to the company’s crypto-wallet would transfer in the event of an emergency? What was his wife’s involvement? Where is all of the missing money? Why did I eat my entire lunch at work before 9 AM? The world may never know, but I am positive that many out there, especially Quadriga’s customers, will not stop searching for answers.


Hochstein, M. (2019). CoinDesk. “QuadrigaCX CEO Set Up Fake Crypto Exchange Accounts With Customer Funds.” Retrieved from: https://www.coindesk.com/quadrigacx-ceo-set-up-fake-crypto-exchange-accounts-with-customer-funds.

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