Topic: [2019-06-20]QuadrigaCX Co-Founder Used User Deposits for His Own Trading, Create (Read 196 times)
June 23, 2019, 08:53:36 AM
And the drama continues. Karpeles was using exchange funds to buy apartments in Tokyo and hire hookers, butterfly labs delayed shipping to mine with their client's hardware, the owner of BTC-e laundered money, this guy traded... Maybe I've been in crypto for too long because these things no longer amaze me. Another day, another scammer.
June 23, 2019, 05:14:30 AM
So can we now confirm that Gerald Cotton had faked his own death? What happened with QuadrigaCX is very clear now. Cotton used the coins from other users for his own trades and in the end he lost all of them. Since he can't reimburse the coins to his clients, he went to a third world country (where bribing officials is easier) and faked his own death.
I agree with the theory that the guy faked his own death to get out of the problem. It was possibly the only way to avoid prison at his situation.
Regarding the discovery that they/he used user funds for their own trading. How this is different from banks? Banks take customers money and the moment they do , it becomes banks money and form there they play with it as they want, they trad stocks and other assets. There are plenty of banks who have gone under because of this reason and governments have bailed them out.
June 20, 2019, 10:47:13 AM
The news made me understand that QudrigaCX users still has hope that their money can still be recovered because its not really trap inside their platform but was “stolen” by Gerald Cotton and was used it another exchange. If they could link each and every single cryptocurrency his fake account has then possibly we will know where the funds went and how much the users can recover from it. I'm also sensing another conspiracy theory here that QuadrigaCX knews this all along and they are just sending us on a wild goose chase.
I think that's the main goal here, they have the assets of left to the widow, for sure they are going to liquidate it to cover some for the refunds, but I don't know if that is enough. Well if they could link and found some crypto's that they can liquidate as well then good. But I doubt they will, it looks like Gerald Cotton and his accomplice really live life to the fullest during that time by using others money to play around for their own benefits.
June 20, 2019, 10:24:00 AM
So can we now confirm that Gerald Cotton had faked his own death? What happened with QuadrigaCX is very clear now. Cotton used the coins from other users for his own trades and in the end he lost all of them. Since he can't reimburse the coins to his clients, he went to a third world country (where bribing officials is easier) and faked his own death.
June 20, 2019, 08:31:01 AM
The news made me understand that QudrigaCX users still has hope that their money can still be recovered because its not really trap inside their platform but was “stolen” by Gerald Cotton and was used it another exchange. If they could link each and every single cryptocurrency his fake account has then possibly we will know where the funds went and how much the users can recover from it. I'm also sensing another conspiracy theory here that QuadrigaCX knews this all along and they are just sending us on a wild goose chase.
June 20, 2019, 08:02:37 AM
This and more similar incident are many big reasons why there must be a strong regulation on the cryptocurrency exchange industry...maybe even stricter than those implemented with stocks, forex, derivatives and similar investment vehicles. What I am concerned is the welfare of the people who laid their trust and confidence to the platform. We can never continue like this if we wanted respect from investors and ordinary guys who are involved with cryptocurrency. Solutions have to be drawn to avoid or at least minimize the chance for another QuadrigaCX fiasco which put a big dagger at the very heart and center of this industry.
June 20, 2019, 07:52:29 AM
And this is why anyone who supports a project or service led by 1 guy (and let's face it, even with centralised projects claiming to have several co-founders like Ethereum, there really is just one man in charge) should always be worried about this single point of failure.
If one day you also discover that BCH, or BSV, or Binance etc. are also caught out by audits to have no segregation between duties, internal controls, or even assets... don't be surprised. 1 guy was "managing funds" on a thumbdrive at Mt Gox. And it's still how many of these companies still work.
If one day you also discover that BCH, or BSV, or Binance etc. are also caught out by audits to have no segregation between duties, internal controls, or even assets... don't be surprised. 1 guy was "managing funds" on a thumbdrive at Mt Gox. And it's still how many of these companies still work.
June 20, 2019, 04:45:13 AM
QuadrigaCX Co-Founder Used User Deposits for His Own Trading, Created Fake Accounts
The deceased owner of the now-defunct Canadian crypto exchange QuadrigaCX was allegedly transferring user funds off the exchange and using them as a security for his own margin trading on other platforms.
The news was revealed in the fifth report from court monitor Ernst & Young (EY), filed on June 19 with the Supreme Court of Nova Scotia.
EY has outlined its principal concerns in relation to the exchange, noting that its operations were “significantly flawed from a financial reporting and operational control perspective.”
In addition to most of the activities being directed by a single individual — the now-deceased co-founder Gerald Cotton — EY notes that there was neither segregation between duties and basic internal controls, nor any segregation of assets between Quadriga’s and user funds.
https://cointelegraph.com/news/quadrigacx-co-founder-used-user-deposits-for-his-own-trading-created-fake-accounts
The deceased owner of the now-defunct Canadian crypto exchange QuadrigaCX was allegedly transferring user funds off the exchange and using them as a security for his own margin trading on other platforms.
The news was revealed in the fifth report from court monitor Ernst & Young (EY), filed on June 19 with the Supreme Court of Nova Scotia.
EY has outlined its principal concerns in relation to the exchange, noting that its operations were “significantly flawed from a financial reporting and operational control perspective.”
In addition to most of the activities being directed by a single individual — the now-deceased co-founder Gerald Cotton — EY notes that there was neither segregation between duties and basic internal controls, nor any segregation of assets between Quadriga’s and user funds.
https://cointelegraph.com/news/quadrigacx-co-founder-used-user-deposits-for-his-own-trading-created-fake-accounts
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