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Following an investigation, QuadrigaCX CEO found guilty of misappropriation of his clients' funds 

Following an investigation, QuadrigaCX CEO found guilty of misappropriation of his clients' funds 
  • If you’ve been around in the cryptocurrency space for over a year now, he will have most likely heard of the QuadrigaCX exchange. 
  • Now, the exchange is under investigation after the Ontario Securities Commission found Gerald Cotten guilty of misappropriation of his customers' funds.

If you’ve been around in the cryptocurrency space for over a year now, he will have most likely heard of the QuadrigaCX exchange. Now, the exchange is under investigation in Canada after the Ontario Securities Commission (OSC) found the former CEO, Gerald Cotten guilty of misappropriation of his customer's funds. According to reports, instead of putting his customer's money into cold storage, the CEO was buying property all over the world with their assets.

Both Gerald and his wife were seemingly living the highlife with a luxury estate, expensive cars and everything you see in the movies. Looking back in time to 2016, the exchange is one of the biggest in the world and specifically, the biggest in Canada. Even though it had no official registration, there were more than 76,000 users on the exchange.

On top of this, the platform had allegedly stored just shy of $170 million in cold wallets with the only password known by the CEO himself. But it seems that he didn’t use the platform's official wallet to hold the funds and instead, he sent them to himself. 

“Cotten was the only person with the passwords to the accounts holding Quadriga’s funds—cryptocurrency and cash—worth approximately a quarter billion U.S. dollars. Nobody knew how to find the money.”

Apparently more than $115 million were used by the CEO for fraudulent means on other big platforms. It was of course without consent from the users on the platform.

Releasing the report this week, the OSC featured the full list of what Gerald had done. Apparently, according to the report he had lost at least $28 million in and on successful trading efforts on three other platforms in the industry as he also used several fake accounts on his platform to give the impression of interest from retail investors. Following a 10 month investigation, the Canadian regulator have said:

“This lack of registration facilitated Cotten’s ability to commit large-scale fraud without detection. So did the absence of internal oversight over Cotten. From 2016 onwards, Cotten was in sole control of a company that had hundreds of thousands of clients and transacted over a billion dollars of fiat currency-denominated assets and over five million crypto-asset units. He ran the business as he saw fit, with no proper system of internal oversight or controls or proper books and records”.

For more news on this and other crypto updates, keep it with CryptoDaily!

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