How Gerald Cotten Pulled Off a $250 Million Heist

In 2013, Gerald Cotten co-founded QuadrigaCX, Canada’s largest Bitcoin exchange, presenting himself as a trustworthy entrepreneur. But behind the scenes, Cotten was orchestrating one of the biggest cryptocurrency scams in history, leaving over 100,000 investors out of $250 million when he allegedly died in 2018.

The Rise of QuadrigaCX

QuadrigaCX quickly became the go-to exchange in Canada, especially after its competitors shut down. Cotten, the public face of the company, built trust by engaging with the crypto community and promoting Quadriga as a reliable platform. However, the exchange was essentially a one-man operation, with Cotten controlling all the private keys to the cold wallets holding users' funds.

The Disappearance of Funds

In December 2018, Cotten reportedly died suddenly in India due to complications from Crohn’s disease while on his honeymoon. His death left QuadrigaCX in chaos, as he was the only person with access to the wallets holding $190 million in cryptocurrency. Investors were unable to withdraw their funds, and the exchange soon filed for creditor protection.

The Mystery Deepens

Questions quickly arose about Cotten’s death. Why was there no autopsy? Why did the death certificate have his name misspelled? Why was the funeral closed-casket? Conspiracy theories swirled, with some suggesting Cotten faked his death to escape with the money.

Investigations revealed that Cotten had been running QuadrigaCX like a Ponzi scheme. He created fake accounts to inflate trading volumes and used new deposits to pay out withdrawals. He also funneled millions into his personal accounts and those of his wife, Jennifer Robertson.

The Aftermath

Ernst & Young, the court-appointed monitor, found that Cotten had lost millions through risky trading and mismanagement. He had also sent large sums to other exchanges, including Poloniex, raising suspicions of money laundering. Despite extensive investigations, $100 million remains unaccounted for.

Lessons Learned

The QuadrigaCX scandal is a stark reminder of the risks in the unregulated world of cryptocurrency. Cotten’s story is a cautionary tale of greed, deception, and the dangers of centralized control. As investors continue to seek justice, one question remains: Where is Gerald Cotten, and where is the money?

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