One of the biggest cryptocurrency exchanges in Canada, QuadrigaCX, has been beset by a series of woes that have culminated in an intractable situation for users.

First 25.7 million Canadian dollars were seized from QuadrigaCX by the Canadian Imperial Bank of Commerce (CBIC). This caused indefinite withdrawal delays for some QuadrigaCX users. QuadrigaCX apparently won a court case to return the money seized by the CBIC, but QuadrigaCX is having a difficult time getting the money into its bank account. While all of this is going on, the CEO and founder of QuadrigaCX, Gerald W. Cotten, supposedly died in India on Dec. 9 2018.

Apparently Cotten had exclusive control of the private keys for 26,488 Bitcoin (BTC), 11,378 Bitcoin Cash (BCH), 11,149 Bitcoin SV (BSV), 35,230 Bitcoin Gold (BTG), 199,888 Litecoin (LTC), and 429,966 Ethereum (ETH), with a total value of $190 million.

QuadrigaCX is claiming in a court document that these funds cannot be recovered at this point, since Cotten’s laptop that holds the keys is fully encrypted.

QuadrigaCX users are suspicious for multiple reasons, with many users on the QuadrigaCX subreddit calling this is an obvious scam. Apparently QuadrigaCX admins are censoring the subreddit, so a new censor-free subreddit has been created, and it is filled with scam accusations.

QuadrigaCX did not publish a list of cold wallet addresses, and users are requesting that QuadrigaCX publish a list of addresses to end suspicion. Users are looking for the cold wallet addresses to see if they are truly inactive.

One user claims to have found QuadrigaCX’s Litecoin (LTC) cold wallet addresses, and claims these addresses are actively being liquidated. It cannot be confirmed at this time that these Litecoin (LTC) addresses are the true QuadrigaCX cold wallet addresses however.

Further, the details and timing of Cotten’s death are suspicious. Apparently the death happened on Dec. 9, which was right in the middle of the legal battle with CIBC. The supposed cause of death is Crohn’s disease, which is usually not fatal.

Cotten was only 30 years old. A death certificate was attached to the court document, but it is not an official death certificate. It is a statement of death from a funeral home. QuadrigaCX users called the funeral home and did not receive an answer. The funeral home’s database did not have a record of Cotten’s death.

Additionally, the official QuadrigaCX statement on Cotten’s death says he went to India to build an orphanage. This statement was deleted from the QuadrigaCX site, but it has been saved by an internet archive. It does not make much sense that Cotten was building an orphanage when he was in the middle of a court battle, while QuadrigaCX customers were suffering due to fiat withdrawal delays.

A cryptocurrency exchange like QuadrigaCX should have had protocol in place to recover cold wallets in the event that Cotten died, especially since Cotten was traveling all the way to India. Many users point out that if Cotten was dying from Crohn’s disease that he would have time to transfer ownership of the cold wallets before death.

An extremely suspicious fact is that Cotten signed his will only two weeks before supposedly dying, right before going to India to build the orphanage. In the will, Cotten left $100,000 to his dogs and put his wife in charge of his estate.

Another major issue is that QuadrigaCX remained opened for deposits of fiat and cryptocurrency well after Cotten’s death, despite exchange admins having the knowledge that the cold wallets had become inaccessible. QuadrigaCX should have suspended deposits immediately upon notice of Cotten’s death instead of waiting over a month.

With this scenario unfolding, It is no wonder that numerous customers are calling QuadrigaCX a scam. Crypto.IQ will update on this situation when more definitive evidence is posted.