According to the investigation conducted by the Ontario Securities Commission (OSC), collapse of crypto exchange Quadriga resulted from fraud committed by the co-founder and CEO Gerald Cotton and not his death.
It had previously been believed that Gerald Cotton took the private keys of the cold storage of the crypto exchange to his grave that hold the customer funds worth $169 million. But the new investigation reveals that Cotten misappropriated QuadrigaCX users’ funds and the cold storage and private key rumor was far from the truth.
According to the investigation, late Gerald Cotton misappropriated QuadrigaCX users’ funds between 2016; it was when he became the sole individual in control of customer funds. He passed away in December 2018.
The report says that the bulk of the asset shortfall, which was approximately $115 million, was traced back to Cotten’s fraudulent trading on the Quadriga platform. The late CEO had several accounts on the platform and frequently traded against Quadriga users with other users’ funds.