QuadrigaCX owner was running a ponzi scheme

bitbollo

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Quote from: xhomerx10 on June 13, 2020, 07:46:20 AM

How the hell is this considered to be a Ponzi scheme?
Cotten was running a Bitcoin exchange. There were no promises of returns on deposits and people were under the impression they were buying or selling their Bitcoin to others on the exchange. Cotten stole people's Bitcoin and money. What happened is a fraud and a theft but by no means was QuadrigaCX a Ponzi scheme. Cotten was an embezzler.
The Ontario SEC needs to up their investigations game a bit.

Technically speaking he wasn't running the classic ponzi scheme but according OSC it seems he has used the "technique" of using new funds deposited to pay older users.

Quote

said in a new report, ran into a shortfall in assets available to satisfy client withdrawals when the price of the crypto assets changed. He started running a Ponzi scheme that covered the shortfall with other clients' deposits, the agency determined.

So probably he has just avoid to pay immediately withdraw requested and waiting for new/fresh deposits on the exchange.

Otherwise if your exchange is able to offer better condition respect the market, also a better % or a fee advantage, despite he is not offering explicit a "fixed returns" it seems like a ponzi scheme since better condition = will allow more people to deposit here.

xhomerx10

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How the hell is this considered to be a Ponzi scheme?
Cotten was running a Bitcoin exchange. There were no promises of returns on deposits and people were under the impression they were buying or selling their Bitcoin to others on the exchange. Cotten stole people's Bitcoin and money. What happened is a fraud and a theft but by no means was QuadrigaCX a Ponzi scheme. Cotten was an embezzler.
The Ontario SEC needs to up their investigations game a bit.

dothebeats

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If there's a second layer in hell, I'm sure Cotten is included within it (if he's really dead). Why would someone play with funds that does not belong to them in the first place? All these time, QuadrigaCX is operating mostly on floating money that does not even exist--not even with the knowledge on some of his 'trustees' and other important staff of the said company. Even if they uncover a lot of the dirty doings of the deceased CEO, there's not much they can do to bring justice to what was done, or even give some money back to those victims of the scheme.

amishmanish

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Quote from: gentlemand on June 11, 2020, 04:49:07 PM

The problem with this tale is that it's EXACTLY what someone this scummy would do and India is EXACTLY the place you'd go to try and pull it off. If I was wifey and it was all true I'd go all out to get it proven and put to bed at the time as otherwise it's going to haunt you for a long, long time.

We'll see I guess but stranger things have happened.

People will do unimaginable shit to scam or get away with money. Yet, its not all that easy in India because if the authorities decide to investigate, you WILL get caught. The problem in this case would have been that it involved a foreign national and his family. There wouldn't have been an investigation but probably a record of hospitalization and a death certificate. Of course, stranger things have happened:

Man kills labourer , burns body in car to fake death for insurance claim

Man kills friend to fake his death for insurance claim

His "body" was repatriated for the funeral. Although it will be heartbreaking but can you blame the people who lost their lives' savings for doubting the story??

gentlemand

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Quote from: boyptc on June 11, 2020, 11:09:23 PM

If they had the money, they can get away. They don't care about the punishment as they know that they can simply feed the authorities with them money they embezzled.

Maybe that's the case if you're in Somalia. In functioning countries that's not going to work.

What they do know is that fraud is regarded lightly in general and it's fraud in an area they don't really care about. If it was fraud against the government they'd be nailed to the wall but since it isn't even if thousands of lives have been devastated you may only get a few months or a couple of years. For many, in the unlikely scenario of getting caught and them building a case, doing the time is worth it if they manage to hide enough.

boyptc

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I'll wait for the things to come for these updates.

Quote from: iRaMMuS34 on June 11, 2020, 04:02:37 PM

I'd really like to see the stats on how many scammers get away with ponzi. Is it really worth it? I know that we don't hear about those who gets away with it, but still...

If they had the money, they can get away. They don't care about the punishment as they know that they can simply feed the authorities with them money they embezzled.

eaLiTy

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Quote from: stompix on June 11, 2020, 04:42:15 PM

~
A lot, way too many. And most of those that were caught ended up with very short sentences and managed to stash a lot of money away.
Trendon Shavers got away with 18 months in prison.

It is the primary reason we see scammers as they are well aware that they will get off with lighter sentences and they can stash all the money and never return and we have lost billions and many just vanished into thin air.

Quote from: bitbollo on June 11, 2020, 03:58:40 PM

But I have no doubt that it's very hard trust an exchange (there is a long list of scam starting from Ubitex including the infamous MTGox).
Not your keys not your coins.

We had many examples in our short period, majority will not last for a very long time and there is no way you can trust any exchanges unless they are regulated and have insurance over the customer funds. We will see those regulations in the future and the idea of starting a bucket shop basement exchanges will be a gone in the next few years.

CaVO32

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Quote from: stompix on June 11, 2020, 04:42:15 PM

Quote from: CaVO32 on June 11, 2020, 04:31:01 PM

even his wife is not in favour to this request? why? considering that she didn't see his husband, one should like to see him one last time and confirm that it is indeed his husband. but nope, she is "heartbroken" Huh

Are you serious?
The guy died on 9 December 2018, how do you think his body looks now?
Would you be that thrilled to have one of your relatives dug up a year after their burial to conduct tests on what's left of them?

Quote from: iRaMMuS34 on June 11, 2020, 04:02:37 PM

I'd really like to see the stats on how many scammers get away with ponzi. Is it really worth it? I know that we don't hear about those who gets away with it, but still...

A lot, way too many. And most of those that were caught ended up with very short sentences and managed to stash a lot of money away.
Trendon Shavers got away with 18 months in prison.

I understand that he did die a long time ago. But for immediate family, it is like closing the chapter if they will see even the bones of their loved ones. Just to put the closure once and for all. And his case is different. He had so many victims that lost money from his business. So it is also for the victims' sake to conduct tests if it was indeed his body or not. Because this case will just be surrounded by more speculations and conspiracy theories if they will not attest that Cotten indeed died in India.

gentlemand

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Quote from: stompix on June 11, 2020, 04:42:15 PM

Are you serious?
The guy died on 9 December 2018, how do you think his body looks now?
Would you be that thrilled to have one of your relatives dug up a year after their burial to conduct tests one what's left of them?

Me and the family pull grandma out of the ground once a year and take her to a theme park. She's getting a bit manky now and her stringy bits have to be carried round in a suitcase but the smell certainly clears them queues like no one's business.

The problem with this tale is that it's EXACTLY what someone this scummy would do and India is EXACTLY the place you'd go to try and pull it off. If I was wifey and it was all true I'd go all out to get it proven and put to bed at the time as otherwise it's going to haunt you for a long, long time.

We'll see I guess but stranger things have happened.

stompix

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Quote from: CaVO32 on June 11, 2020, 04:31:01 PM

even his wife is not in favour to this request? why? considering that she didn't see his husband, one should like to see him one last time and confirm that it is indeed his husband. but nope, she is "heartbroken" Huh

Are you serious?
The guy died on 9 December 2018, how do you think his body looks now?
Would you be that thrilled to have one of your relatives dug up a year after their burial to conduct tests on what's left of them?

Quote from: iRaMMuS34 on June 11, 2020, 04:02:37 PM

I'd really like to see the stats on how many scammers get away with ponzi. Is it really worth it? I know that we don't hear about those who gets away with it, but still...

A lot, way too many. And most of those that were caught ended up with very short sentences and managed to stash a lot of money away.
Trendon Shavers got away with 18 months in prison.

CaVO32

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and uncovering those shady dealings and more to come will make you think that this owner just only faked his death to get away his shady dealings. and it would be interesting what will be the results of the exhumation request from the victims' lawyers.

https://globalnews.ca/news/6293160/quadriga-cx-exhume-gerald-cotten/

even his wife is not in favour to this request? why? considering that she didn't see his husband, one should like to see him one last time and confirm that it is indeed his husband. but nope, she is "heartbroken" Huh

it is the only way to confirm if he is really dead and put a period on more speculations so she should agree with this request if they are not hiding anything.

gentlemand

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It's quite possible things got out of hand and there were no evil intentions to start with, though I seem to recall the 'dead' man had involvements in Ponzi schemes as a teen as well. A lot of these people are overconfident assholes who believe they have the power to blag their way out of any corner. Then real life catches up with them.

And where does this leave the other guy, the one with the stupid alias, who's still going? He was posting on r/bitcoinmarkets about monster trades on Bitfinex at the time presumably with customer cash.

iRaMMuS34

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I'd really like to see the stats on how many scammers get away with ponzi. Is it really worth it? I know that we don't hear about those who gets away with it, but still...

bitbollo

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According to the Ontario Securities Commission it seems that QuadrigaCX owner was running a ponzi scheme with this exchange.
Plus

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Another $28 million was lost when Cotten used client assets on three external crypto asset trading platforms without authorization or disclosure.

with a total of

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about $115 million of the $169 million clients lost to Cotten's "fraudulent" trading.

https://www.cbc.ca/news/business/osc-quadriga-gerald-cotten-1.5607990

If these funds are truly "stucked" all the remaining coins are worth slightly more

I don't know if the news it's already confirmed by other source, and more details will be uncovered in the next month.
But I have no doubt that it's very hard trust an exchange (there is a long list of scam starting from Ubitex including the infamous MTGox).
Not your keys not your coins.

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