Quadriga - Revisiting The $190 Million Crypto Scandal
Bitcoin trading platform Quadriga was once trusted by Canadian crypto investors. In its downfall, the trust turned into doubts and eventually into disgust. How can one blame those who entrusted their life savings to Quadriga? Take another look into one of the crypto scandals of 2019.
Kenzo NormanSep 01, 202211 Shares327 Views
Earlier this year, a documentary from a popular American streaming service refreshed the memories of those familiar with the story about Quadriga.
On March 30, 2022, the Netflix true-crime documentary Trust No One: The Hunt for the Crypto Kingmade its premiere.
As can be hinted from the title, it’s about cryptocurrency.
But the title alone doesn’t give any clue that it’s a story involving the bankrupt company Quadriga.
The trailer reveals it’s about a crypto scandal to the tune of $190 million that rocked the Canadian crypto community.
And who’s that crypto king?
Is he the one responsible for the mismanagement and/or loss of that insane amount of money?
Did he cause the downfall of Quadriga, which, at one point, used to be the number one choice for crypto exchange in Canada?
Trust No One: The Hunt for the Crypto King | Official Trailer | Netflix
In December 2013, the then 25-year-old Gerald “Gerry” Cotten and his business partner, Michael Patryn, launched Quadriga in Canada.
It’s a digital currency exchange focusing on Bitcoin but also trades other cryptocurrency assets.
The launch was timely because at that time, Bitcoin’s value was high and Canadians wanted easy access to a Bitcoin trading platformQuadriga charges a transaction fee on buyers and sellers.
That’s how it generated revenue.
Regarding the other co-founder, Michael Patryn’s birth name turned out to be Omar Dhanani.
Before he moved to Canada and changed his name, a U.S. court convicted him in 2015 for charges relating to false identity and money-laundering.
He and Cotten had a falling off in 2016.
OSC noted that when Patryn, aka Omar, left, Cotten took the reins of the company completely.
Those who left also included:
the Chief Financial Officer (CFO)
accountants
legal counsel
By 2017, approximately 363,000 people traded via Quadriga, resulting in almost $2 billion worth of trades.
Imagine how much Cotten made money from all those transaction fees.
After speaking to former clients and investors, the OSC learned the two major reasons why they trusted Quadriga:
It’s a Canadian company.
They found Cotten trustworthy.
A gold Bitcoin beside a white bar graph with a red arrow heading downward at the end
The rumors that the Quadriga CEO faked his death have persisted up to 2022.
Gerald William “Gerry” Cotten (1988-2018), the son of antiques store owners, Bruce and Cherryl Cotten, grew up in Belleville, according to Vanity Fair.
He has a sibling named Bradley.
Cotten earned his business administration degree in 2010 at the Schulich School of Business in York University in Toronto.
He was in an honors program.
From his hometown, Cotten relocated to Vancouver a couple of years after he graduated.
It was there where the future co-founder and CEO of Quadriga would begin his cryptocurrency journey.
There in that seaport, he encountered the Vancouver Bitcoin Co-op, a group of approximately ten entrepreneurs.
He would participate in their meetings.
They would talk about Bitcoin and other matters related to cryptocurrency, such as decentralization.
Alex Salkeld, one of the co-op’s original members, described Cotten as “always smiling, really friendly.”
Gerald Cotton in a stripe long sleeve shirt seated beside a Bitcoin ATM machine at the Quadriga office in Canada
Cotten incorporated QuadrigaCX (Quadriga coin exchange) in British Columbia in November 2013.
Michael Patryn, aka Omar Dhanani, joined him.
A quadriga is a chariot during the Roman Empire drawn by four horses.
Quadriga eventually proved itself as Canada’s “cheapest,” “fastest,” and “safest” crypto exchange, as described by Vanity Fair.
It cemented the credibility of Cotten’s Bitcoin trading platform.
That time, it was the first of its kind to secure a license from FINTRAC.
And, as the cliché goes, the rest is history.
Years later, he would accumulate incredible material wealth through Quadriga.
Cotten purchased four houses: three in Canada and one in the U.S.
One sits on a 4-acre (1.6 hectares) property in the town of Mahone Bay in Lunenburg County, Canada.
Then each in Calgary and in Kelowna in British Columbia.
In addition to that: a three-bedroom house in an opulent neighborhood in the city of Fall River in Bristol County, Massachusetts.
His other assets also included:
a Lexus (Toyota’s luxury vehicle division)
a $600,000-dollar yacht (nickname: Gulliver)
a CESSNA 400 (per Aviator Insider, a brand-new unit of this aircraft carries a price tag of $466,000 to $620,000)
14 residential rental properties (one in Bedford, England; others in different parts of Canada, such Nova Scotia)
Aside from frequent recreational trips abroad with his wife, they still got time for some charitable works.
They intended to find a home for a dozen children living in an Indian orphanage.
However, roughly a month before 2019 ushered in, the life of the cofounder and CEO of Quadriga was cut short.
Cotten was supposed to be enjoying an Indian honeymoon trip when one day he found himself taken to Fortis Hospital in Jaipur.
He complained of stomachache, which was later found out to be acute gastroenteritis.
At 30, Cotten died on December 9, 2018 - he got admitted, December 8 - due to “complications from Crohn’s disease.”
With no known cure, Crohn’s disease causes the tissues in the digestive tract to swell.
The New York Post reported that Cotted had three heart attacks while confined.
The third one took the life out of him.
His funeral was held in Halifax, Nova Scotia.
Based on the information from Find a Grave, Cotton’s remains were cremated.
With his death, the way to access the Bitcoin reserves of Quadriga seemed to “die” as well.
Unless those who died left nothing to provide access to their Bitcoins, finance website Kiplinger said that those crypto coins “could disappear forever.”