There is a lot to unpack in the story of QuadrigaCX. There are several good lessons to learn from this event, even if you were impacted directly. If you don't already know the story of Quadriga, it goes like this. QuadrigaCX was a popular Canadian cryptocurrency exchange. The founder and CEO of the exchange died suddenly, and the keys to the exchange's wallets supposedly died with him. You will come to find out that the plot thickens even more. This all leads to the collapse of Quadriga and the loss of $190 million worth of user funds.
My History with Quadriga
I used QuadrigaCX for about a year and a half before deciding to stop using their services. At a certain point, I noticed mysterious abnormalities in the Canadian Dollar transactions I was sending myself. For context, I was getting paid in bitcoin at the time from a blockchain project called peerplays, a decentralized gambling and gaming platform. I was depositing the bitcoin onto Quadriga so I could convert what I needed in order to pay my bills. I used to receive each paycheque in just a couple of days, eventually it was taking weeks. The last time i withdrew money from Quadriga, it took 3 weeks. This was when I decided to stop using their cryptocurrency exchange services. This was for the first 6-8 months of 2018, just four months before the death of the Gerald Cotten.
The Death of the Founder
The founder of QuadrigaCX died suddenly in December of 2018. The rest of the company quickly shut down the website and issues a notice that the CEO had just perished, along with the keys to the exchange. Needless to say, the hundreds of thousands of Canadian users were not very pleased with the situation. It wasn't long before people were calling law enforcement to deal with the total loss of funds. As you may be aware, if the keys to the cryptocurrency wallets are truly gone, then so too is the cryptocurrency that belongs to the users. Blockchain savvy reddit users decided to keep an eye on the wallets that belonged to QuadrigaCX. One of the tools that would enable this sort of tracking might be CipherTrace.
The Plot Thickens; Crypto on the Move
These reddit users ended up detecting that some of the funds had been moved. The exchanges' Litecoin was moved out of a wallet that was apparently lost forever. The only way those funds moved, is with the private key. This immediately brought an intense increase of already present skepticism on the entire story of the death of Gerald Cotten. Further investigation would reveal that Cotten had filed a will with his lawyer just 6 days before his death in India. It is known that India is a common place where forged death certificates can be found.
A True Ponzi Scheme
The business was no doubt being run as a ponzi scheme. It was revealed that Gerald Cotten had a long history of conducting money laundering, and pyramid scheme style businesses. The crash of bitcoin and other cryptocurrencies at the end of 2017 signalled the beginning of the end for Quadriga. It was only a matter of time before enough users of the exchange demanded their money back.
More on The Quadriga Story
In episode 17 of the Go Full Crypto Podcast, Mrugakshee and I talk in depth about the story of Quadriga, and the lessons that can be learned. I've just told you the basics of it all, that really just the tip of the iceberg.
The Go Full Crypto Vision
We want to help people opt-into the world of cryptocurrency, one dollar at a time. In order to do this, people must need a reason. They need their own "why" behind discarding their government currency for the world currency of the future. Go Full Crypto is putting out content to help people discover the reason why they want to get involved in cryptocurrency.
Download Episode 17 of Go Full Crypto - Uncovering the Story of QuadrigaCX
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