[2019-02-06] Locked bitcoins in QuadrigaCX might be another exit scam. - page 4.

o_e_l_e_o

legendary

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Quote from: bbc.reporter on February 05, 2019, 11:14:08 PM

There are new stories surfacing that the people left running the exchange are using the founder's death to exit scam.

I think it is more likely the founder has faked his death, and it is him that is still in control of the exchange's addresses.

Quote from: davis196 on February 06, 2019, 01:59:29 AM

If this is really an exit scam,I'm pretty sure that the QuadrigaCX's coins will be sold,or atleast moved to some other wallets.

Remember that Quadriga required all its customers to go through KYC procedures. Given that this looks like it has been going for months, with no cold wallets in existence and the owner just constantly skimming funds off for himself, it was quite possibly he has used some of these KYC documents to open accounts at other exchanges under other people's names and use them to cash out all the stolen coins. Doubly concerning for anyone who has lost their money on the exchange.

davis196

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If this is really an exit scam,I'm pretty sure that the QuadrigaCX's coins will be sold,or atleast moved to some other wallets.Perhaps there is a way to track those transactions.
"Using one client's deposits to fund other client's withdrawals" looks like a clissical ponzi scheme.
Other small crypto exchanges are going the same scam,and they will burst soon.

figmentofmyass

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Quote from: elda34b on February 06, 2019, 01:31:15 AM

Quote from: blockman on February 06, 2019, 12:56:35 AM

why on Earth they didn't used multisig wallet?

There are a lot of stories, one of them said that Quadriga did in fact used a multisig wallet. But it doesn't matter if they don't have the money in the first place. Lots of people are starting to do their own chain analysis to find out where exactly does Quadriga store their money. Everything related to Cryptocapital sounds very shady now.

cryptocapital is shady. like bitfinex, they bank like criminals and organize themselves offshore under a cloak of anonymity.

i don't think they're shady because of their association with quadriga though. they're just a payment processor/bank who works with lots of crypto exchanges. although maybe youre right that it does raise questions about cryptocapital's due diligence on their clients. they're known for working with smaller and less compliance-minded exchanges.

elda34b

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Quote from: blockman on February 06, 2019, 12:56:35 AM

why on Earth they didn't used multisig wallet?

There are a lot of stories, one of them said that Quadriga did in fact used a multisig wallet. But it doesn't matter if they don't have the money in the first place. Lots of people are starting to do their own chain analysis to find out where exactly does Quadriga store their money. Everything related to Cryptocapital sounds very shady now.

blockman

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Vave.com - Crypto Casino

I'm not familiar with QuadrigaCX until it was on the news with some bad exposee that the owner was totally dead. I don't have 100% source that the owner is totally dead. I have read some comments that it truly might be an exit scam and they haven't shown an actual proof that guy was caught dead. I hope that this case wouldn't be the same as Mt.Gox. It's a lot of money that they have locked and why on Earth they didn't used multisig wallet?

figmentofmyass

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Quote from: bbc.reporter on February 05, 2019, 11:14:08 PM

Does everyone remember the story of QuadrigaCX's founder, who was claimed to be the only person in control of the exchange's cold wallet, died in India on December, 2018? There are new stories surfacing that the people left running the exchange are using the founder's death to exit scam.

We might begin witnessing more small exchanges doing exit scams if the bear market extends out longer.

Also, do not trade in small and unknown exchanges.

this is a really important point many folks don't realize. when the bull market is raging, exchanges---even fractional reserve ones---can keep riding the gravy train. it's during the bear market that we see who's been swimming naked, so to speak.

i've been quietly expecting some events like cryptopia and quadriga to unfold for a while now, particularly after the crash from $6k. this is the most brutal part of the bear cycle. volumes and revenues are dead, hype is long gone, overheads are bleeding businesses dry. all of a sudden, getting "hacked" and closing up shop starts to look a lot more tempting.

bbc.reporter

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Does everyone remember the story of QuadrigaCX's founder, who was claimed to be the only person in control of the exchange's cold wallet, died in India on December, 2018? There are new stories surfacing that the people left running the exchange are using the founder's death to exit scam.

We might begin witnessing more small exchanges doing exit scams if the bear market extends out longer.

Also, do not trade in small and unknown exchanges.

Quadriga's motto

The Canadian exchange claims it has lost access to $145 million of digital assets due to its founder’s death, however, it is likely that QuadrigaCX never had this money.

QuadrigaCX, the largest Canadian cryptocurrency exchange in terms of trade volume, has recently grabbed the headlines due to its controversial insolvency. It filed for creditor protection after the sudden death of the company’s founder and CEO Gerald Cotten, which had led to the liquidity crisis.

The explanation for this was rather extraordinary. It turned out that Cotten was the only person who controlled all private keys to the cold storage wallets where QuadrigaCX used to hold almost all of its funds. As a result, QuadrigaCX had to confess it failed to locate or access about $145 million in various digital assets.

At first, humanity prevailed. After all, Cotten was only 30 years old, and he went to India with a charitable goal to open an orphanage where he died. Meanwhile, his widow has been reportedly receiving threats from the clients of the exchange, who are furious and learning a tough lesson of the golden cryptocurrency rule, ‘not your keys, not your coins.’

Notably, Jesse Powell, the head of the Kraken exchange, which is one of the largest and most influential exchanges, also shares these views. In his latest post on Twitter, he touched on issues of witnesses, identity verification, and credibility of a death certificate. He is ready to share some insider information with Canadian authorities if the need arises.

Besides the above-mentioned $145 million in digital assets, the exchange also owes its users more than $50 million in fiat currency, according to the court filing. The fiat issues started because of a legal dispute between QuadrigaCX and the Canadian Imperial Bank of Commerce (CIBC), which last year froze multi-million accounts linked to Costodian Inc., one of Quadriga’s payment processors. There were also problems with Billerfy and WB21, two more payment processors working with Quadriga and are holding part of its funds.

In this regard, Powell claimed the entire case looked very much like an exit scam. He cites the suspicious combination of recent developments, including sudden disappearance of the founder after fiat problems and high withdrawals.

To make things worse, a respected crypto industry researcher, Crypto Medication, published a comprehensive blockchain analysis of Quadriga’s addresses and transactions. Based on its findings, the experts concluded that QuadrigaCX did not have as much Bitcoin as it claimed on the affidavit which it submitted to the Canadian court.

Even worse, the researchers revealed that the exchange had no identifiable cold wallet reserves. Instead, it used one client’s deposits to fund another client’s withdrawals. This explains the occasional delays in withdrawal execution, as sometimes QuadrigaCX did not have enough liquid funds at its disposal.

Read in full https://beincrypto.com/quadrigacx-saga-human-tragedy-or-yet-another-exit-scam/

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