Report Finds Quadriga Founder Stole Clients' Cryptocurrency Before Death (financialpost.com) 52
lazarus writes: As part of the investigation being done by Ernst & Young into the mismanagement of client's cash and cryptocurrency at Quadriga Fintech Solutions Corp they have found that the late founder and CEO Gerald Cotten transferred client's cryptocurrency to personal accounts on rival exchanges and heavily traded on them. "Competitor exchanges received multiple forms of cryptocurrencies from Quadriga wallets from 2016 through 2019 -- 9,450 Bitcoin, 387,738 Ethereum and 239,020 Litecoin," reports the Financial Post. "Quadriga's cryptocurrency reserves were 'adversely affected' by trading losses and incremental fees charged by other exchanges, the report said."
"The late CEO also created accounts under aliases where 'unsupported deposits' were used to trade within the platform, resulting in inflated revenue figures, artificial trades with users and ultimately the withdrawal of cryptocurrency, the report said. And 'substantial funds' were transferred to Cotten personally and other related parties." The report also paints a picture of an organization that was run by a single person from his laptop with no oversight, segregation of duties and responsibilities, and no internal controls.
"The late CEO also created accounts under aliases where 'unsupported deposits' were used to trade within the platform, resulting in inflated revenue figures, artificial trades with users and ultimately the withdrawal of cryptocurrency, the report said. And 'substantial funds' were transferred to Cotten personally and other related parties." The report also paints a picture of an organization that was run by a single person from his laptop with no oversight, segregation of duties and responsibilities, and no internal controls.
Re: Posted here 2 hours ago. (Score:1)
Something lost on Twitter users and Trump supporters alike... and AC posters too!
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The fucker isn't dead, he fled to Mexico or some South American country. You can literally buy your way into places like that and change your identity without anyone knowing.
Here we go... (Score:5, Interesting)
And yet the actual blockchain/ledger performed all the transaction securely and without fail as per the key holders instructions. Three cheers for the integrity of the blockchain protocol.
Sad to hear about a mismanaged company holding other peoples keys for them though.
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Kinda makes you wonder what Zuck is going to do with his founder's stock of FB Coinz. Anyone looking over HIS shoulder?
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It is not "a" mismanaged company. It is a complete ecosystem of mismanagement, greed and stupidity.
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Sad to hear about a mismanaged company holding other peoples keys for them though.
Based on the history of blockchain companies, that is more likely to happen than not.
Re: Here we go... (Score:2)
Actually, that's only happened a handful of times and there are dozens if not hundreds of unregulated exchanges. So, your assessment is wrong on its face.
In addition, no regulated exchange has ever had this happen. So, just use a regulated (American or Japanese or Korean) exchange, and the risk pretty much disappears, at least historically.
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HIstory is valid in this statement.
In the History of US Banking, owners of banks sometimes
made bad investments with the depositors money, and then
they ran to avoid the hanging.
this happened as far as I know about 15 to 20 times from
1870 to 1895.
do a search on bank failure and the time period.
"Before his death"? He's likely not dead (Score:5, Interesting)
NOTE:
1) He filed his will 12 days before his death.
2) He had $190 million in other people's assets when he died.
3) He died right when the sh** was about to hit the fan at Quadriga. Very convenient.
4) Details of his death are sparse at best.
Cast those details against the very sketchy life of the CEO and it's highly questionable that he's actually dead. He had a singular opportunity to retire as an extraordinarily wealthy man, and he most likely took it.
Re:"Before his death"? He's likely not dead (Score:5, Informative)
Reportedly, a legal death certificate goes for $75 in that part of India.
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Say he is still alive, how does he intend to spend any his ill gotten gains? All transactions on the blockchain are public, any conversion to cash he can actually use will be immediately detected.
Maybe he is just dumb, screwed up and ran hoping to wait for the heat to die down.
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I'm betting all of that stolen crypto has already gone through the coin laundry several hundred times.
People always find ways around rules, whether those rules are enforced by people, or by software. The key is to make it sufficient difficult to get around them, which is something we have with the traditional finance industry but not in crypto (yet).
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Say he is still alive, how does he intend to spend any his ill gotten gains? All transactions on the blockchain are public, any conversion to cash he can actually use will be immediately detected.
But if you use an exchange, your transactions aren't directly on the blockchain. That's the point of an exchange: it lets you cross from one blockchain to another, or from a blockchain to real moneys. There is no public way to track where money that goes into an exchange goes out of it, and even the exchange itself doesn't actually know who owns the wallets it sends money to and from. And that's just built-in to exchanges: if you are seriously trying to launder money, there are dozens of ways to do it on la
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Sure, but we can see the coins get transferred to the exchange, and the exchange knows the bank details of where it paid out from that balance. So obviously interested parties who lost millions or who are law enforcement are going to ask the exchange, possibly backed up by whatever legal means are available.
I suppose he could find a dodgy exchange that doesn't keep such records, or who won't hand them over.
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Exchanges aren't just converting bitcoin to cash and back. They also convert one cryptocurrency to ano
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His death was reported in Indian media to be by cardiac arrest. On admission, he was diagnosed with septic shock, perforation, peritonitis, and intestinal obstruction [indiatimes.com]. The same source says that his wife was given a no objection certificate to take the body back to Nova Scotia, Canada.
This Scam City video [youtube.com] shows that a legal death certificate can be bought in US$450. But in Cotten's case, there is also a hospital admission, ...etc.
Some Canadian media skepticism [thechronicleherald.ca] when his death was announced, quoting the ease o
Re: Bitcoin!!!! (Score:1)
If you let them. Are you saying we are forced to choose between being mauled by a bear or eaten by a lion? Why do either?
i wonder why it's called kleptocurrency (Score:3)
Why would a (pseudo)anonymous, thinly traded, highly manipulable asset attract crooks?
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Is anybody surprised by this? (Score:2)
Well, I am sure the cryptocurrency-morons will find an explanation. Some people insist on being victims....
"Death" (Score:2, Insightful)
Shouldn't "Death" be in quotes?
Just go after the wife (Score:4, Interesting)
If the wife has to give up all the properties bought since Quadriga started she will sell him down the river to the media for a few bucks.
Re: Just go after the wife (Score:1)
Only if she wasn't just one of the people who was conned.