Canadian Bitcoin Investor Who ‘Dies’ Left $ 137 Million in Customers’ Money in Limbo
Canadian Bitcoin investor whose sudden death in 2018 left $ 137 million of his clients’ money in limbo had spent millions to fund his own lavish lifestyle and had been in business with a white collar criminal .
Gerald Cotten, who was the 30-year-old founder of cryptocurrency trading platform Quadriga CX, died while on his honeymoon in India in 2018.
The company kept his death a secret for a month before announcing it and then filed for bankruptcy after Cotten’s wife Jennifer Robertson revealed her late husband was the only person with the passwords needed to access to investor funds. This devious behavior has sparked speculation that Cotten has faked his disappearance and is still alive.
At the time of Cotten’s death, Quadriga CX owed its 76,000 investors approximately $ 137 million (C $ 215 million). The nation’s largest securities regulator ruled last year that the collapse of Quadriga CX was due to a Ponzi scheme operated by Cotten.
Royal Canadian Mounted Police and FBI investigations are underway after investors raised concerns over the mysterious timing of Cotten’s death.
Speculation among clients has been rife that Cotten could have faked his own death and they are pushing authorities to have his body exhumed in Canada to prove their theory.
Gerald Cotten, who was the founder of cryptocurrency trading platform Quadriga CX, 30, died while on his honeymoon in India in 2018. He is pictured with his wife Jennifer Robertson in India .
One of those investors, identified only as QCX-INT, spoke at length to CBC for his A Death in Cryptoland.
“He couldn’t control himself at first glance and just spent an absolutely mind-blowing amount of money,” QCX-INT told the podcast.
QCX-INT spent months investigating Cotten and Quadriga CX before passing its information on to Canadian and US authorities.
It is not clear to what extent QCX-INT’s own survey forms the basis of ongoing surveys.
He – and other investors – have criticized Canadian authorities for what they claim to be a lack of investigation.
“It’s theft… It’s like a $ 200 million bank job could happen, and you have a law enforcement agency doing next to nothing to investigate,” he said.
“Even when they are provided with hard evidence of fraud, you know they keep coming back and saying to us, ‘We need more evidence, even to investigate,’ he said. to have to present them with a bloodied corpse and a gun with fingerprints on it just for them to investigate. ”
The Ontario Securities Commission ruled last year that the collapse of Quadriga CX was due to a Ponzi scheme operated by Cotten. He found that Cotten had misappropriated assets for personal use. Included in the report was this image of bundles of cash in his house
The Ontario Securities Commission revealed in its June 2020 report that some 76,000 investors collectively lost at least $ 124.2 million (CAD $ 169 million) as a result of the Quadriga collapse in 2019
The commission found that Cotten traded on the platform and that clients were not informed when Cotten was the counterparty to their trades.
During its investigation, QCX-INT determined that Cotten co-founder Michael Patryn was a convicted white collar felon.
Patryn, who was born Omar Dhanani, has changed his name at least twice over the years.
He was convicted in the United States in 2005 for his role in an identity theft ring and was sentenced to 18 months in prison before being returned to Canada.
Cotten co-founder Michael Patryn was a convicted white-collar felon who served time in the United States for an identity theft ring.
Patryn, who changed his name to Michael Patryn after his release from prison, says he was unaware of Cotten’s connections and left Quadriga in 2016.
Cotten’s wife also said she was unaware of her late husband’s dealings.
Cotten died in December 2018 of complications from Crohn’s disease while traveling to India.
His death came four days after making a will, which left all of his assets to his wife, including $ 9 million in real estate, a Lexus, a Cessna plane and a yacht.
His death certificate issued by Indian authorities has his name incorrectly spelled.
After waiting a month to announce his death, the company revealed that Cotten was the only person with access to passwords for digital wallets holding around $ 135 million.
Following his death, QuadrigaCX was unable to locate or secure a significant amount of cryptocurrency reserves.
Cotten died in December 2018 of complications from Crohn’s disease while traveling to India. His death came four days after making a will, which left all of his assets to his wife, including $ 9 million in real estate, a Lexus plane, Cessna and a yacht.
The Ontario Securities Commission revealed in its June 2020 report that some 76,000 investors collectively lost at least $ 124.2 million (C $ 169 million) as a result of the Quadriga collapse in 2019.
About C $ 115 million was owed to Cotten’s fraudulent transactions, the regulator said.
When Cotten died, the platform owed its customers around C $ 215 million, according to the commission. Cotten also embezzled assets for personal gain, transferring around C $ 24 million to himself and Robertson between May 2016 and January 2018, according to the report.
Approximately C $ 34 million was recovered by the bankruptcy trustee and paid to clients. The trustee also recovered assets from Robertson which are expected to be worth around C $ 12 million, while Cotten returned around C $ 10 million to Quadriga in the months leading up to his death.
Speculation raged among investors that Cotten is in fact still alive and living on embezzled funds.
Lawyers representing some clients filed a complaint in late 2019 asking police to exhume Cotten’s body to make sure it is him.
In an affidavit, Cotten’s widow said she had been subjected to online threats and “defamatory comments,” including claiming that her husband was not dead.
To date, no decision has been made on whether Cotten’s body can be exhumed.