CEO of Canada’s largest crypto exchange mysteriously dies in India taking keys to $150 million with him
Another day, another exit scam in the world of cryptocurrency.
If this is not a classic inside job fake death, then I don’t know what is. From an outsider’s objective point of view this case has all the qualities of an inside job. But then don’t believe me, let’s look at the facts as we know them so far and you make your own conclusions.
You can’t read the original report in the online Canadian news outlet The Globe and Mail unless you’re a paid subscriber – I tried – but the initial report there from this past week mentions that the CEO of the oldest and largest cryptocurrency exchange in Canada mysteriously left his body (died) in India taking with him the only keys to the entire customer funds in its wallets, totaling around $145 million in cryptocurrency.
Sorry for your loss...
as they say, though just whose loss are we lamenting? The wife’s or the hundreds of clients? And that is the unanswerable question. CEO of QuadrigCX, Gerry Cotton may have apparently died two months ago already on December 9, but why did it take them so long to reveal this information? And who in their right mind has only one person controlling the cold wallets to the entire company? Anything could happen to that person. He may be kidnapped or he may suddenly “die” and then you’re screwed.
An offering to Vishnu
Well the worst has happened and now the company has only $286 000 in cash available, while they owe $198 million to their hundreds of customers. As a result they have filed for creditor protection from the Nova Scotia Supreme court. To protect their clients’ assets the company had kept all the funds offline in a “cold wallet” but the CEO had the only “keys” and his widow is unable to get into his computer to try to recover them. The major accounting firm Earnest & Young have been appointed to oversee the proceedings though at this stage it looks like the funds are now nothing more than “an offering to Vishnu”, since he died in India.
The deeper you go the thicker it gets
The plot gets thicker as we delve deeper, for apparently the company was already in a major legal battle with their Canadian bank, and clients had been unable to easily access their funds for some time already. The widow, Jennifer Robertson recently made a post on Reddit, so I read it, and discovered still further intrigue in many of the comments by seriously disgruntled customers there.
He died in a foreign land
It transpires that Cotton the CEO was only in his mid thirties and is reported to have died in India of Crohn's disease, a chronic inflammatory condition of the gastrointestinal tract. I’ve been to India three times and know how easy it is to develop stomach illnesses there, yet there are still too many unanswered questions regarding this case. For example, why is there no obituary in the Canadian press? Why is there no official clearance at the Royal Canadian Mounted Police? All we have are some social media posts by the wife.
No fixed address
Something is rotten in the state of Vancouver, or is it British Columbia? That is the next suspicious red flag. The QuadrigCX exchange company kept changing its postal address, and basically had no brick and mortar office that one could find. Also, there are very few staff listed- three - on LinkedIn, which is where one goes to find out exactly such details when wanting to do business with a company.
One Reddit commenter put it succinctly:
“The fact that he "died" over a month ago, in the midst of a huge legal battle, out of the country, in the 2nd most populated country in the world, in a place that's known for its scammers, bribery, and forging of documents is suspicious enough.”
You can't retrieve it if it's not there
On top of that the withdrawal limit on the exchange was suddenly greatly reduced, so anyone trying to transfer their funds out was blocked by a bottleneck that would take some years to get through. I guess that’s because the funds were no longer there to withdraw. So that, along with no obituary or coroner’s report, no online trace on LinkedIn, or anywhere, of whether the company staff are even who they say they are, looks like a classic exit scam. I mean even if it isn’t, it glaringly looks like one and the company really needs to improve its unprofessional customer relations and PR.
But who are you if you're not online?
It is extremely rare and almost impossible for anyone to not have some minimal online presence or “footprint” nowadays, but the staff and wife of the CEO (Jennifer Robertson), as well as a certain Aaron Mathews are all close to non-existent. And for a company this big – the biggest in Canada – to have only three staff, when other similar companies have dozens or hundreds, all with profiles on LinkedIn, is hugely suspect.
Enough loose ends to make a rug
Even if we give them the benefit of the doubt, and accept that Jerry Cotton the CEO was in India on a philanthropic journey to open an orphanage and then suddenly died in his thirties while his company was in a huge legal battle, taking the keys to $140 million with him, leaving no coroner’s report, still there are too many other suspicious loose ends. Some of the non-existent company addresses for example. And Crohns disease doesn’t just suddenly pop up. It is a chronic condition, and you don’t go to India with an illness like that already in your system. I should know, having brought back a serious stomach disease that I collected there on my second trip, fortunately cured with meds quite easily.
Earliest reference
One reference that does come up online is a Youtube video from back in March 2015 already, of an interview with the founder of QuadrigCX, named Michael Patryn, who seems to be a really early bitcoin investor. There the intro reads that the company was the world’s first publicly traded bitcoin exchange. Check it out if you like, I leave the link below, along with some other links to any info on the case I’ve researched. You can make your own decisions. After all, we don’t want to speak ill of the dead, but at least we should have some proof that they actually are dead before we give them that due respect. And the proof is dubiously limited at the moment.
Keep your crypto in a cold wallet
Let me know if you find out more by leaving a comment below. We really should get to the bottom of this. Scams are so common in the cryptocurrency industry that you can’t blame anyone for not wanting to touch it. After this I’m really encouraged to move my bitcoin off the exchange and into a cold storage wallet, like a “ledger” or “trezor”, or at least onto an online wallet where I have my own keys. This is certainly the best practice for us all.
Refs: https://www.bbb.org/ca/bc/vancouver/profile/currency-exchange/quadrigacx-0037-1281832/details#BBB-Investigation-Results
https://www.canlii.org/en/on/onsc/doc/2018/2018onsc6680/2018onsc6680.html?searchUrlHash=AAAAAQAKUXVhZHJpZ2FDWAAAAAAB&resultIndex=1
Now that's a first. At least for me.
It's seriously disturbing to see to what lengths some people will go to in order to pull off their scams and rip people off their hard earned crypto....
Not to mention that it will only get worse as time goes on, people stack more coins and they begin to go up in value. Who knows what kind of stories we will hear about in the next couple of years but something tells me that this won't be the only case of a CEO "dying" and taking keys of the cold wallet with him.
Yes that's a good point that ultimately we are at the mercy of the exchanges and their owners. In this case the CEO was apparently running the entire exchange from his computer at home with no staff, and when the law courts started getting involved, he just skipped out altogether. We may never know the full story and most of the info is based on rumour, so I may be wrong in my conclusion here, but there are too many really disgruntled customers who lost a huge amount of money and there are too many loose ends. If it looks like a scam it probably is one. Even if it's not and he did die, then it is hugely unprofessional and very foolish.
You will be surprised to find that most of the exchanges out there do not provide even a postal address, what more a brick and mortar office address.
Binance, for instance, does not provide a postal address nor a brick and mortar address. They are one of the biggest, if not the biggest, exchange. Worst still, if you check their TOS, you will notice that they do not even provide the registered name of the company and the registered address. In addition, there is no mention of the governing law and jurisdiction.
If you look at their "Dispute Resolution" clause you will be shocked.
Imagine how ridiculous they can get. They will resolve disputes at their sole discretion! Thus, in their discretion, if they think the dispute need no resolution, they can just ignore you! I wonder what was running in their mind when this clause was drafted. They probably thought everybody else. other than them, is an idiot.
Just compare their TOS with that of cex.io here: https://cex.io/terms and bittrex.com, here: https://bittrex.zendesk.com/hc/en-us/articles/360001411486.
Here is the link to Binance TOS: https://www.binance.com/agreement.html
Thanks for the references and insights devann. That is a cause for concern that the exchanges like Binance, and apparently also Kucoin may be so hidden from view. Just recently Binance, which is probably one of the biggest exchanges in the world, was up to some suspicious activity in collusion with Tron and Bittorrent. The latter was a pump and dump as the coin was launched on the exchange recently. CZ and Justin Son seem to be in cahoots as they say and up to some questionable activity that suited only their insider circle. The rot is setting in within the crypto world, much like it is in regular finance, with very unscrupulous activity going on. Big banks do it so I guess money corrupts even the most noble souls. Unfortunately the powers that be have engineered the material world to operate under the monetary system, which distracts people from the real goal of life, namely self-realization and consciousness awakening. Traditionally in Vedic culture the wisest brahmana teachers were happy to be penniless, living on charity from the Raja.
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