QuadrigaCX

» see quadrigacx.com as it lived, on the wayback machine

~ the obit ~

quadrigacx never reached turkey at meaningful scale. it was a canadian-coded product, the exchange most canadians used to convert canadian dollars into bitcoin because foreign exchanges did not deal in cad. lower trading fees than coinbase, a vancouver address, a quiet halifax-based ceo named gerald cotten. the kind of place where the bigger story was always the spread.

then in january 2019 the press release showed up. gerald cotten, thirty years old, dead in india from crohn's complications on a honeymoon trip with his new wife. and one detail that broke the rest of the bitcoin world's brain: all the company's cold wallets had been on cotten's encrypted laptop, and only cotten knew the passwords.

the math after he died never balanced. court-appointed monitors looking for the customer coins found about 250 million canadian dollars worth of crypto missing, plus another 70 million in unaccounted fiat. by june 2020 the ontario securities commission published a report calling it "an old-fashioned fraud wrapped in modern technology." cotten had been running alias accounts and faking trades for years, gambling customer money on competing exchanges. the india trip was not the cause of the hole. it was the moment the hole stopped being hideable.

~ the rap sheet ~

~ how it landed ~

quadriga started in vancouver in late 2013 as canada's first dedicated bitcoin exchange. the canadian market was small but had a real funding gap. north of the border you could not just sign up for coinbase the way americans did, and quadriga's pitch was that it took canadian dollars and converted them at a fair rate. by 2017 it was processing more than a billion canadian dollars a year in bitcoin volume and was the default canadian on-ramp for crypto.

cotten kept a low profile through most of this period. his co-founder michael patryn was later revealed to be an alias for omar dhanani, a convicted credit-card fraudster who had served time in the us. patryn left the company in 2016 and the trail goes quiet on the inside for a while. cotten ran the rest of it himself out of his halifax house. there was no real office and no outside auditor. customer crypto sat in wallets that he personally controlled.

~ the day it died ~

the announcement that broke the story came on january 14 2019. quadriga's board posted that cotten had died on december 9 of complications from crohn's disease while traveling with his wife in jaipur, india. the indian hospital that issued the death certificate confirmed the date. the body was repatriated and cremated in canada. there was no autopsy.

within hours the bitcoin forums had pivoted from condolences to a single shared question: where are the keys. quadriga's filing for creditor protection in nova scotia on february 5 included an affidavit from cotten's widow stating that her husband had been the sole holder of the cold-wallet passwords and that nothing on his laptop was recoverable. the trustee ernst and young then traced the company's known wallet addresses on the public bitcoin chain and found that the supposed cold storage had been empty for months before cotten died.

~ what got buried with it ~

the netflix documentary "trust no one: the hunt for the crypto king" landed in march 2022 and put quadriga in front of an audience much wider than canadian crypto twitter. it pulled in the conspiracy theories that had been circulating for two years: that cotten had faked his death, that the india trip was a planned exit, that the body in the indian hospital had been someone else. nobody has ever produced evidence for any of that. the ontario securities commission's own report had already established the more banal answer. cotten was running a ponzi for years and his death just exposed the gap.

i was not a quadriga customer. i was not anywhere near canadian dollars in 2018. but the story has a shape that crypto people kept hitting after that: an exchange, a missing founder, missing keys, a press release that asks you to trust the math anyway. mt. gox set the template in 2014. quadriga added the noir version. by the time ftx happened in 2022 the canadian story sat right in the middle of the playbook.

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