Canadian Bitcoin investor who ‘died’ left $137M of customers’ money in limbo


A Canadian Bitcoin investor whose sudden death in 2018 left $137 million of his clients’ money in limbo had spent millions funding his own lavish lifestyle and had been in business with a white-collar criminal. 

Gerald Cotten, who was the 30-year-old founder of cryptocurrency trading platform Quadriga CX, died while he was on his honeymoon in India in 2018.

The company kept his death secret for a month before announcing it and later declared bankruptcy after Cotten’s wife, Jennifer Robertson, revealed her late husband was the only person who had the passwords needed to access investors’ funds. That shifty behavior has sparked speculation that Cotten faked his demise, and is still alive. 

At the time of Cotten’s death, Quadriga CX owed its 76,000 investors approximately $137 million ($215 million CAD). The country’s biggest securities regulator ruled last year that Quadriga CX’s collapse was due to a Ponzi scheme operated by Cotten. 

Investigations by the Canada’s Royal Canadian Mounted Police and the FBI are ongoing after investors raised concerns about the mysterious timing of Cotten’s death. 

Speculation among clients has been rife that Cotten may have faked his own death and they are pushing authorities to have his body exhumed in Canada to prove their theory.

Gerald Cotten, who was the 30-year-old founder of cryptocurrency trading platform Quadriga CX, died while he was on his honeymoon in India in 2018. He is pictured with his wife Jennifer Robertson in India

One of those investors, identified only as QCX-INT, spoke at length to CBC for its A Death in Cryptoland.

‘He couldn’t control himself, by the looks of things, and blew just an absolutely eye-popping amount of money,’ QCX-INT told the podcast. 

QCX-INT spent months investigating Cotten and Quadriga CX before passing his intel onto Canadian and US authorities. 

It is not clear how much of QCX-INT’s own investigation forms the basis of the ongoing probes. 

He – and other investors – have been critical of the Canadian authorities for what they claim is a lack of investigation.  

‘It’s theft… It’s like a $200-million bank job could happen, and you’ve got a law enforcement agency that does next to nothing about investigating it,’ he said.  

‘Even when there is hard evidence of fraud provided to them, you know, they would continually come back and say to us, ‘We need more evidence, even in order to investigate,’ he said. ‘I felt like I actually had to present them with a bloody corpse and a gun with fingerprints on it in order just to get them to investigate.’ 

The Ontario Securities Commission ruled last year that Quadriga CX's collapse was due to a Ponzi scheme operated by Cotten. It found that Cotten had siphoned off assets for personal use. Included in the report was this image of wads of cash in his home

The Ontario Securities Commission ruled last year that Quadriga CX’s collapse was due to a Ponzi scheme operated by Cotten. It found that Cotten had siphoned off assets for personal use. Included in the report was this image of wads of cash in his home

The Ontario Securities Commission revealed in its June 2020 report that some 76,000 investors collectively lost at least $124.2 million (C$169 million) from the collapse of Quadriga in 2019

The Ontario Securities Commission revealed in its June 2020 report that some 76,000 investors collectively lost at least $124.2 million (C$169 million) from the collapse of Quadriga in 2019

The commission found that Cotten was trading on the platform and that clients were not informed when Cotten was the counterparty to their trades

The commission found that Cotten was trading on the platform and that clients were not informed when Cotten was the counterparty to their trades

During his investigation, QCX-INT determined that Cotten’s co-founder, Michael Patryn, was a convicted white collar criminal.

Patryn, who was born Omar Dhanani, changed his name at least twice over the years.

He was convicted in the US in 2005 for his role in an identity theft ring and was sentenced to 18 months in prison before being deported back to Canada.

Cotten's co-founder, Michael Patryn, was a convicted white collar criminal who served time in the US over an identity theft ring

Cotten’s co-founder, Michael Patryn, was a convicted white collar criminal who served time in the US over an identity theft ring

Patryn, who changed his name to Michael Patryn after being released from prison, says he had no knowledge of Cotten’s dealings and left Quadriga in 2016.

Cotten’s wife has also said she had no knowledge of her late husband’s dealings.

Cotten died in December 2018 due to complications from Crohn’s disease while traveling to India.  

His death came four days after he completed a will, which left all of his assets to his wife, including $9million in real estate, a Lexus, Cessna plane and yacht. 

His death certificate issued by Indian authorities has the incorrect spelling of his name.  

After waiting a month to announce his death, the company revealed Cotten was the only person with access to passwords for the digital wallets holding roughly $135 million.

In the wake of his death, QuadrigaCX was unable to locate or secure a significant amount of cryptocurrency reserves. 

Cotten died in December 2018 due to complications from Crohn's disease while traveling to India

His death came four days after he completed a will, which left all of his assets to his wife, including $9million in real estate, a Lexus, Cessna plane and yacht

Cotten died in December 2018 due to complications from Crohn’s disease while traveling to India. His death came four days after he completed a will, which left all of his assets to his wife, including $9million in real estate, a Lexus, Cessna plane and yacht

The Ontario Securities Commission revealed in its June 2020 report that some 76,000 investors collectively lost at least $124.2 million (C$169 million) from the collapse of Quadriga in 2019. 

About C$115 million of that was due to Cotten’s fraudulent trading, the regulator said. 

When Cotten died, the platform owed approximately C$215 million to clients, according to the commission. Cotten also siphoned off assets for personal use, transferring about C$24 million to himself and Robertson between May 2016 and January 2018, the report found.

About C$34 million was recovered by the bankruptcy trustee and paid to clients. The trustee also recovered assets from Robertson expected to be worth about C$12 million, while Cotten returned about C$10 million to Quadriga in the months before his death.  

Speculation has been rife among investors that Cotten is actually still alive and living off the embezzled funds.

Lawyers representing some clients filed a lawsuit in late 2019 asking police to exhume Cotten’s body to make sure it’s him.

In an affidavit, Cotten’s widow said she has been subjected to online threats and ‘slanderous comments’, including claims that her husband is not dead. 

To date, a ruling has not been made about whether Cotten’s body can be exhumed. 

 



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