QuadrigaCX was a Ponzi scheme!

QuadrigaCX was a Ponzi scheme!

By Jumble | Jumble | 12 Jun 2020


In a report written by the Ontario Securities Commission (OSC), it was said the that cryptocurrency trading platform QuadrigaCX operated as a Ponzi scheme. QuadrigaCX, was Canada's largest cryptocurrency exchange. QuadrigaCX was owned by Quadriga Fintech Solutions.

Gerald William Cotton, the CEO and founder of QuadrigaCX, died suddenly in December 2018. In 2019 QuadrigaCX stopped to operate and it was declared bankrupt. At that time QuadrigaCX had cash assets of $20.7 million USD and the value of invested funds totaled $159.8 million USD.

But the $159.8 million was missing. It is possible that the cryptocurrencies bought by Cotton can be found in the hardware wallets that Cotton had. But Cotton was the only person who knew the private key and seed phrase.

More than 76,000 investors lost at least $124.2 million USD. Since the customers' deposits are missing, it is not known what Cotton did with the customers' deposits. The report says that Cotton transferred money from new investors accounts into the accounts of older investors when the price of cryptocurrencies decreased. It is also possible that Cotton did not invest the customer deposits.

The report also says that during the time period between May 2016 and January 2018 that Cotten transferred approximately $17.8 million USD of customer deposits to himself for personal use.


Jumble
Jumble

Technical and marketing content writer. And a cryptocurrency fanatic.


Jumble
Jumble

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