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How Investors lost their Bitcoins in QuadrigaCX

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QuadrigaCX, the largest cryptocurrency exchange in Canada, declared bankruptcy in 2019. Gerald Cotten passed away while on a trip to India, and he never disclosed his crypto cold wallet credentials to anybody. More than 115,000 investors are thus left without access to their cryptocurrency fortunes and with few options for reclaiming their holdings. So, we will see how investors lost their bitcoins for no reason and the stories around that.

How Investors lost their Bitcoins

Gerald Cotten, an owner of QuadrigaCX, passed away while visiting Jaipur, India, as a result of complications from his Crohn’s condition. Chronic digestive tract inflammation, known as Crohn’s disease, causes severe diarrhoea, exhaustion, and other symptoms. The true shocker was that Cotten took his knowledge of all of QuadrigaCX’s clients’ cold wallet passwords with him to his grave. His encrypted laptop, to which only Cotten had access, had the passwords. This implied that the whole client’s money, or about $140 million, was permanently gone.

Even before he passed away, customers were unable to use the exchange to get their money. After Bitcoin started to collapse in October 2018, several customers started the withdrawal procedure. weeks of waiting in vain for money to show up in their bank accounts. 

The question deepens since Cotten made a will giving his wife $11 million nine days before his passing. A few weeks after Cotten passed away in January 2019, QuadrigaCX suspended trading and declared bankruptcy. All these circumstances fueled the speculations that Cotten faked his death and ran off with the money.

The Formation of QuadrigaCX

In 2013, Cotten joined hands with a guy by the name of Michael Patryn to start QuadrigaCX, which went on to become Canada’s largest bitcoin exchange. 

The real sting in this situation is that Cotten knew Patryn from his days of dark web browsing. Patryn was six years older than Cotten at the time. However, it was later discovered that Patryn had connections to organised crime in the past.

The QuadrigaCX exchange became the quickest and safest option to convert money into bitcoin when it swiftly achieved success. Additionally, it made history by being the first cryptocurrency exchange to have a license from FinTRAC, Canada’s anti-money laundering agency.

Cotten, however, cut ties with Patryn in 2016 as part of a widespread personnel migration brought on by the unsuccessful IPO of the exchange. Cotten was the sole person in charge of the exchange’s finances following the exodus.

Being the biggest and most prosperous exchange in Canada is due in part to Bitcoin seeing one of the greatest price increases in cryptocurrency history in 2018. The cost of one bitcoin increased from $1,000 to $20,000 in a few months. As a result, a lot of individuals jumped on the Bitcoin bandwagon and invested heavily in QuadrigoCX.

Cotten gained a sizable fortune as a result of the Bitcoin explosion. He acquired a yacht, a Cessna airplane, and sizable real estate holdings. It was inevitable that the surge would come to an end, and it did so when Bitcoin plummeted in late 2018. Customers of the exchange wanted to cash out.

The Circumstances of Cotten’s death

As was previously stated, Cotten passed away from Crohn’s illness while on his trip to Jaipur, Rajasthan. At the age of 24, he received a Crohn’s disease diagnosis, which he managed to live with for six years. Crohn’s disease is a serious condition, but with the right care, it is not likely to be fatal.

Also raising suspicions was how his corpse was handled in Jaipur. His death certificate included a spelling error. Instead of Cotten, his name said “Cotton.” This raised the possibility that he had falsified his death certificate. Strangely, the exchange didn’t disclose the passing of its founder for another month.

Crypto Investigations

The Ontario Securities Commission’s inquiry revealed that Quadriga CX was effectively a “Ponzi scheme.” Cotten had “false Quadriga accounts, spent phony monies, and conducted actual trades, wagering on the value of cryptocurrencies,” according to the inquiry.

The Ontario Securities Commission stated in its investigation that Gerald Cotten, a co-founder and CEO of Quadriga, had defrauded the company, which led to Quadriga’s demise.

A report by auditor Ernst & Young also found funds were transferred to Cotten personally and to other parties. In total there was CA$33 million in missing funds, reports the BBC.

What happens to users who lost their wallet access

People promote Bitcoin as anonymous but anyone can track transaction which happens on the network. Anyone with a wallet address can track or see transactions and wallet bitcoin balance. Investors who lost their funds created a community where they track if there is any movement of funds. One Reddit user extracted and published it on a Reddit post.


Anyone can check their wallet on bitcoin block explorer here.

These addresses are:

For a total of 104.33500226 BTC. Notably, every address was inactive since April 2018 and the majority of their received BTC was either directly from the QCX hot wallet or a wallet 1 transfer removed from the hot wallet.

A documentary titled ‘Trust No One: The Hunt for The Crypto King’ investigates the suspicious death of Gerald Cotten, a bitcoin millionaire and founder of Canadian crypto exchange, QuadrigaCX.

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