Why bitcoin investors want to exhume the body of a Crypto company former CEO

Why bitcoin investors want to exhume the body of a Crypto company former CEO

This story is as cryptic as the world of cryptocurrency itself. It is neither funny nor sad. About 76,000 people who invested in the Canadian crypto-currency exchange QuadrigaCX want the body of its former CEO, Gerald Cotten, exhumed. If you haven’t heard the story before, let’s break it up for you …

The genesis of the QuadrigaCX bitcoin scandal

In mid-January 2019, QuadrigaCX announced that the founder of the bitcoin company had died in December the previous year while visiting India. The 30-year-old crypto exchange founder Gerald Cotten allegedly died “due to complications with Crohn’s disease on December 9, 2018 while travelling in India, where he was opening an orphanage to provide a home and safe refuge for children in need.”

Gerald Cotten image
Gerald Cotten/ Photo Courtesy

The unexpected death of the founder would have been like any other unexpected deaths, only that there was a problem: the only person who knew the passwords to the ‘cold storage’ of the QCX platform was Cotten. And now he was dead – and buried.

His widow, Jennifer Robertson, swore an affidavit with the Nova Scotia Supreme Court admitting that QuadrigaCX indeed owed its clients approximately USD 190 million in both crypto and fiat currency, but she was filing for creditor protection because the company could not access the money hence could not pay anyone.

The amount of money held by the QuadrigaCX exchange:

  • 26,500 bitcoin (USD 92.3 million)
  • 11,000 bitcoin cash (USD 1.3 million)
  • 11,000 bitcoin cash SV (USD 707,000)
  • 35,000 bitcoin gold (USD 352,000)
  • 200,000 litecoin (USD 6.5 million)
  • 430,000 ether (USD 46 million)  
  • Total = USD 147 million (Cryptocurrency sometimes fluctuates at astonishing levels and it is now at an upward trend.)

Ms Robertson claimed in her affidavit that Cotten held “sole responsibility for handling the funds and coins” and no other person had that privilege on the team. Therefore his death with the passwords meant he had died with client’s money.

Did Gerald Cotten actually die?

That is the question on many people’s minds. Is Gerald Cotten actually dead or is it a ploy by some people to swindle clients’ money? Now, USD 190 million is a lot of money by any standards. QuadrigaCX’s clients want to verify what is actually in that grave.

On Friday, December 13 2019, the Nova Scotia Supreme Court lawyers wrote to the Canadian police demanding an autopsy of the body inside Cotten’s grave (if at all there is a body). According to them, an autopsy would help clear the air on the identity of the corpse and the cause of death.

One of the questions that is giving a strong case for the exhumation is a July report by investigators showing that Mr Cotton spent much of his clients’ money on himself and his wife.

Cotten had actually drained the accounts eight months before ‘his demise’ and the hot wallets which are more easily accessible just had a few coins. There is belief much of the money was transferred into ‘cold storage’ which is difficult to hack, but which Ms Robertson claims it only had a ‘few coins’ too. To verify her claims or to know how much money is/was in the ‘cold storage’ someone must bring Cotten back to life for the passwords.

The auditors, Ernst and Young, estimate that QuadrigaCX should have assets at least worth USD 214 million, of which USD 34 million has been recovered. But then, the company had filed for bankruptcy in January following the alleged death of Cotten.

The missing links in the QuadrigaCX cryptocurrency exchange scandal

The report by Ernst & Young noted that neither Mr. Cotten nor his wife had any material income outside Quadriga but that Mr. Cotten claimed no income from the company on his tax returns. Yet the couple “acquired significant assets including real and personal property” and “frequently travelled to multiple vacation destinations often making use of private jet services,” the report said.

Bloomberg reported in March that QuadrigaCX cofounder Michael Patryn was previously known as Omar Dhanani, and had changed his name. He had also been sentenced to 18 months in prison for “identity theft related to a bank-and-credit card scam” before being deported to Canada. He however claims he had parted ways with Cotten three years ago after a disagreement over how QCX should be listed.

So, did Gerald Cotten fake his own death?

A lawyer representing Ms Robertson said the widow was heart broken to learn about the exhumation as Cotten’s death should not be in doubt. Richard Niedermayer spoke to the New York Times for the widow.

The Canadian government had said that a Canadian had indeed died in India at the time when Cotten is said to have passed on, and an Indian hospital released records and a death certificate to confirm the same. But all that cannot make Cotten’s former clients to rest until they indeed ascertain that he is the man in that grave. If he is not, then where is he?

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