Quadriga CX Ponzi scheme case has been stretched over the years but now the final word has been put forth by the Canadian authorities. The cryptocurrency exchange from Canada was working as a Ponzi scheme, Canada security regulators have concluded, moreover, accusing that the fraud became the cause of its end.
Gerald Cotten, Quadriga CX’s founder died back in December 2018 and the company also fell apart after his demise locking away millions of dollars in his account giving way to Quadriga CX Ponzi scheme claims.
Cotten had diverted millions of dollars from the unsuspecting clients, in order to cover the trading losses, along with spending those funds on his extravagant lifestyle. Around $169 million were lost collectively by 76,000 investors from all over the globe including Canada.
Quadriga CX Ponzi scheme, the official version
The Ontario Security Commission (OSC) stated that the Vancouver-based exchange met its end due to the fraud that was committed by Gerald Cotten marking the Quadriga CX Ponzi scheme on the official level. Moreover, it was alleged that many accounts were opened with a false identity and Cotten credited his accounts with imaginary currency and crypto assets balances that he was trading with the unwitting Quadriga clients.
Furthermore, according to the OSC’s statement, it was stated that Cotten also covered the deficit in funds open for the withdrawals of the clients with the deposits of other clients, thereby, working as a Ponzi scheme.
As reported earlier Jennifer Robertson had put forth an affidavit in the court claiming that she was unable to access the funds Cotten had locked away in his cryptocurrency wallets due to the lack of security keys. Around the same time, the cryptocurrency sphere was buzzing with the Quadriga CX Ponzi scheme claims but with no valid proof. Ernst & Young had been appointed as monitors who later explained that the couple,
acquired significant assets including real (estate) and personal property…. ….frequently traveled to multiple vacation destinations often making use of private jet services.
Ernst & Young, the monitor appointed by the court stated that the Cotton couple had possessed substantial assets and had often visited vacation destinations multiple times and frequently made use of private jet services.
Moreover, funds were transferred from Quadriga CX to competitor exchanges and into Cotten’s accounts. However, the auditors could not identify many wallet holders and the accounts are still in cold assets.
Although the Quadriga CX Ponzi scheme claim is now finally official, there are still many questions that remain unanswered especially because the ledger of Robertson’s assets and the expenditure does not justify the millions of dollars of investment losses.
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