Quadriga Cryptocurrency Wallets are Empty

AlphaAtlas

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When Quadriga's CEO, Gerald Cotten, died in late 2018, the cryptocurrency exchange lost access to millions of dollars of cryptocurrency locked away in cold storage. His window claimed that the funds would be inaccessible unless a password or recovery key was found, but according to recent reports, those funds were never there in the first place. Ernst & Young, who were appointed to the role of monitor by the Supreme Court of Nova Scotia, says that six of the "cold wallets" were emptied months before the CEO's death, and that one of the wallets stayed in use to receive Bitcoin from another exchange. They've encountered a number of other inconsistencies and roadblocks in their subsequent investigation, and now some online communities are even speculating that the CEO faked his own death in India. Thanks to Guarana [BAWLS] for the tip.

When the monitor asked Quadriga's remaining representatives why the company had stopped depositing bitcoin into its cold wallets last spring, they were unable to name a reason. Ernst & Young says it's researching any external accounts Quadriga might have had on other exchanges.In another unsettling detail, Ernst & Young also learned that 14 user accounts had been "created outside the normal process by Quadriga," apparently using aliases and bogus funding... Speculation about what happened to Quadriga's bitcoin holdings has now reached a fever pitch. Even before Ernst & Young concluded that wallets that were purported to be Quadriga's key bitcoin reserve were actually empty, Canada's Globe and Mail newspaper published a story last week asserting that Quadriga co-founder Michael Patryn has used an alias to cover up his true identity as "a convicted felon who served time in the United States for his role in an online identity-theft ring."
 

seanreisk

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Ah-ha! Sounds like a good excuse to find Mr. Cotten and sign him up for some state-sponsored reparative butt-sex.

How hard can it be to find a rich, white hipster in India?
 

kju1

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Ah-ha! Sounds like a good excuse to find Mr. Cotten and sign him up for some state-sponsored reparative butt-sex.

How hard can it be to find a rich, white hipster in India?

Chances are he didnt stay in India...i mean lets be hoenst that place isnt all that great. He probably moved to some small tropical island and filled it with hot naked women.
 

haste.

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How did E&Y find out they were empty? I thought it was uncrackable - the article says analytics, but either the right people can crack it or the key wasn't "lost". I just breezed the article so may have missed something though.
 

Dead Parrot

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Movie deal soon? Depending on who's money is missing, if Mr Cotten is still alive, he had better stay hidden and only spend modest amounts of money at any one time.
 

Zarathustra[H]

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Lol. Did he fake his death and leave the country?

Or maybe he was murdered for the bitcoin? :p
 

dreadcthulhu

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So, what's the nicest country that doesn't have an extradition treaty with Canada? That would be a good place to start looking.
 

Tak Ne

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How did E&Y find out they were empty? I thought it was uncrackable - the article says analytics, but either the right people can crack it or the key wasn't "lost". I just breezed the article so may have missed something though.

I'm not even sure you'd need to crack them, If you know the addresses you could see all the transactions by examining the blockchain. Just guessing here.

Update: Business Insider says... A previous version of this story incorrectly stated that investigators cracked Cotten's laptop and discovered money was missing. In fact, they have possession of his laptop and identified money was missing through public blockchain records.
 
Last edited:

dvsman

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I thought that the whole point to crypto was the blockchain and traceability? So if the funds were traded out to other accounts which aren't locked - you should be able to be able to see the activity right, even if you can't access / get 'write access' to it.

But yeah, unless they have his corpse in a cooler, he's sitting on a beach somewhere with an upgrade to his wife v1.0 :-D
 

Slade

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you don't need to see inside a wallet to follow the transaction trail: if the transactions don't add up correctly from other accounts, you can begin to paint a picture of what is insde.
 

zkostik

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this just became my favorite story. i hope they find an empty apartment in india under one of his alias with a gun and wad of cash in a briefcase, surrounded by various passports. i LOVE IT

It's still crypto, he has to be able to have some idiot cash it out for him. Great story indeed, I'm not a bit surprised to see something like this though.
 

haste.

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I'm not even sure you'd need to crack them, If you know the addresses you could see all the transactions by examining the blockchain. Just guessing here.

Update: Business Insider says... A previous version of this story incorrectly stated that investigators cracked Cotten's laptop and discovered money was missing. In fact, they have possession of his laptop and identified money was missing through public blockchain records.
So it was a "third party" device... makes more sense. Blockchain has it's place and I'd like to see it utilized in something other than crypto for security purposes, but yikes it is being utilized for the worst possible purposes!
 

kju1

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So it was a "third party" device... makes more sense. Blockchain has it's place and I'd like to see it utilized in something other than crypto for security purposes, but yikes it is being utilized for the worst possible purposes!

Its the new hotness. You can point to these kinds of things happening with all sorts of new tech.
 

Master_shake_

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Wtf... on what ? (ok I didn't read everything but I don't think there's ANY evidence of her doing anything wrong?)

she is sole owner of his estate therefore party to fraud.

it's her baby now.

marriage is a bitch.
 

MMitch

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she is sole owner of his estate therefore party to fraud.

it's her baby now.

marriage is a bitch.

I doubt it works like that... at least I hope not.
If you can show me evidence she knew and was part of a scheme, ok, otherwise... she's part of it as much as you and me.

With this thinking someone who crash his car while been DUI and died would make his wife go to jail for killing the other passenger ? Wtf
 

nightanole

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I doubt it works like that... at least I hope not.
If you can show me evidence she knew and was part of a scheme, ok, otherwise... she's part of it as much as you and me.

With this thinking someone who crash his car while been DUI and died would make his wife go to jail for killing the other passenger ? Wtf

Like the enron guy that off'd himself the day before the trial so his wife would get everything free and clear.
 

Vaulter98c

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Quote from the top post/news snippet: His window claimed that the funds would be inaccessible unless a password
It's not fun when I have to explain the point.

Came to see if anyone caught that, was almost disappointed lol
 

daglesj

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There will be more like this.
Count on it.


Wouldn't surprise me that the 'powers that be' could pay to setup new cryptocurrency and exchanges and then purposely crash them like this to destroy public confidence in them.
 

motomonkey

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Wouldn't surprise me that the 'powers that be' could pay to setup new cryptocurrency and exchanges and then purposely crash them like this to destroy public confidence in them.

Which "powers that be"?

The Man?
The international Jewish Banking conspiracy?
The Illuminati?
The Deep State?
The Rothschild's?
The Trilateral commission?

gotta be specific when talking about conspiracy theory, yaknow.
 

Exavior

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while i have no issue with cryptocurrency itself. It definitely appears to be a huge target for fraud. All you ever hear is how these companies that are suppose to be a "bank" just end up stealing all the money people store in them.

This is were being unregulated currency bites them.
 

daglesj

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Which "powers that be"?

The Man?
The international Jewish Banking conspiracy?
The Illuminati?
The Deep State?
The Rothschild's?
The Trilateral commission?

gotta be specific when talking about conspiracy theory, yaknow.


Oh that would be 'all of them'.
 

kju1

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Wouldn't surprise me that the 'powers that be' could pay to setup new cryptocurrency and exchanges and then purposely crash them like this to destroy public confidence in them.

Um do you really think anyone has the time, energy, or money to bother with that shit? Especially not when its doing just fine imploding on its own.
 

daglesj

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Um do you really think anyone has the time, energy, or money to bother with that shit? Especially not when its doing just fine imploding on its own.


But the cost to set this stuff up is pretty minimal, let it run, screw it up get the news coverage, reduce the public's faith a bit more blah blah blah. And the reason it's imploding on it's own is...maybe...go back to my original post.

Like rich and powerful folks (even Govt agencies) with a lot to lose have never thrown a brick into a competing pond that threatens their hold on the world order?
 

kju1

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But the cost to set this stuff up is pretty minimal, let it run, screw it up get the news coverage, reduce the public's faith a bit more blah blah blah. And the reason it's imploding on it's own is...maybe...go back to my original post.

Like rich and powerful folks (even Govt agencies) with a lot to lose have never thrown a brick into a competing pond that threatens their hold on the world order?

Define minimal.
 

motomonkey

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But the cost to set this stuff up is pretty minimal, let it run, screw it up get the news coverage, reduce the public's faith a bit more blah blah blah. And the reason it's imploding on it's own is...maybe...go back to my original post.

Like rich and powerful folks (even Govt agencies) with a lot to lose have never thrown a brick into a competing pond that threatens their hold on the world order?

If it’s that easy, wouldn’t it be just as easy to co-opt crypto for “The Man”? Let’s just jump right down the rabbit hole here, if the NSA has access to some of the worlds most powerful supercomputers, they could mine crypto with idle time and use it to manipulate the market. What better way to get untraceable funds for all sorts of skullduggery than crypto? A trivial task for a government with access to that much computing power.

Your imagination could run wild on this sort of thing, but perhaps it’s already did all the running it should for a while.
 
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PaulP

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If it’s that easy, wouldn’t it be just as easy to co-opt crypto for “The Man”? Let’s just jump right down the rabbit hole here, if the NSA has access to some of the worlds most powerful supercomputers, they could mine crypto with idle time and use it to manipulate the market. What better way to get untraceable funds for all sorts of skullduggery than crypto? A trivial task for a government with access to that much computing power.

Your imagination could run wild on this sort of thing, but perhaps it’s already did all the running it should for a while.
How do we know that the NSA didn't invent block-chain and bit-coin for this very purpose?
 
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