QuadrigaCX, one of Canada’s most popular cryptocurrency exchanges, appears to be in a serious predicament — its customers can’t get access to $190 mln worth of crypto after its CEO, Gerald Cotton, unexpectedly died from Crohn's disease in India. Cotton was the only person who had access to the virtual keys to the exchange’s cold wallets, and many people suspect that the whole thing could be a huge exit scam.
Is he really dead?
The unfortunate death of the Canadian crypto CEO might not have even happened at all. Multiple scam allegations are picking up steam after the news spread like wildfire across numerous news outlets.
The thing is, their story about how he died is a bit fishy. He was only 30, and they're saying he died from complications due to crohn's disease while opening an orphanage in India. A lot of people are finding this hard to believe.— Adam (@ChalicothereX) February 4, 2019
However, Freddie Heartline, one of QuadrigaCX’s very first customers, who also happens to be Cotton’s longtime friend, believes that these accusations do not have any substance. He claims that Cotton was ‘a really nice guy’ who wouldn’t be able to pull off an exit scam.
The CEO’s widowed wife Jennifer Robertson revealed that she received multiple death threats from disgruntled customers. Cotton’s will was yet another log on the fire given that it was signed two weeks prior to his ‘unexpected’ demise with (you guessed it) Robertson being the sole executor. The alleged death certificate didn’t cool down the exchange’s users, who think that it is bogus. Notably, the certificate was issued in Nova Scotia, not India.
It is also worth mentioning that several outgoing transactions have been detected after Cotton’s death, which took place on Dec. 9, 2018. Obviously, that doesn’t fit the narrative.
Fascinating article on forensic #blockchain analysis in the #QuadrigaCX case.— Chetan Phull (@SmartblockLaw) February 4, 2019
Reportedly, "[s]everal outgoing transactions" from QuadrigaCX addresses "have been made since the alleged date of Gerald Cotten’s passing (December 9th, 2018)".#crypto #lawhttps://t.co/D5wxJmXBmB
Regulatory uncertainty is to blame
As of now, deposit insurance doesn’t apply to cryptocurrencies in Canada, which signifies the importance of proper regulations. In case of any black swan situation, customers will have to deal with the consequences.
On Oct. 29, U.Today also reported about another Canadian exchange, MapleChange, facing the wrath of its users after an unexpected hacking attack gave ground to suspicions about a potential exit scam.
QuadrigaCX is currently seeking creditor protection to prevent any lawsuits from disgruntled customers. The court hearing will take place on Feb. 5.