According to the investigation conducted by the Ontario Securities Commission (OSC) discovered that it was due to fraud, and not the death of Quadriga’s CEO Gerald Cotton, which led to the loss of $169 million in customer funds of the Canadian crypto exchange. It was believed that the CEO of the exchange had taken the private keys of the cold storage of the crypto exchange to his grave that hold the customer funds worth $169 million. But the new investigation reveals something else.
The OSC claims late Gerald Cotten misappropriated QuadrigaCX users’ funds.
The Ontario Securities Commission investigation claims that it was a fraud, and not the death of Quadriga’s CEO, which led to the loss of $169 million in customer funds. According to the investigation, late Gerald Cotton misappropriated QuadrigaCX users’ funds between 2016; it was when he became the sole individual in control of customer funds. He passed away in December 2018. It was initially believed that the CEO had kept the funds in cold storage that only he owned the private keys for. But the investigation revealed that the cold storage and private key rumor was far from the truth.
Gerald Cotten used exchange’s customer funds for his own use.
The report says that it is widely speculated that the bulk of investor losses resulted from crypto assets becoming lost or inaccessible as a result of Cotten’s death. But according to the investigation, this was not the case. The evidence demonstrates that most of the $169 million asset shortfall resulted from late CEO Cotten’s fraudulent conduct, which took several forms,” says the report. The bulk of the asset shortfall, which was approximately $115 million, was traced back to Cotten’s fraudulent trading on the Quadriga platform. The report further revealed that the late CEO had several accounts on the platform and frequently traded against Quadriga users with other users’ funds.