QuadrigaCX Collapse — January 2019

QuadrigaCX was Canada's largest cryptocurrency exchange in 2017-2018. Founder Gerald Cotten operated it from a Halifax laptop with no formal office or employees, and exclusive control of the exchange's wallets, banking and operations.

On 14 January 2019 QuadrigaCX's board announced that Cotten had died on 9 December 2018 in Jaipur, India. The official cause was complications of Crohn's disease. He was 30 years old. The board stated that Cotten had been the sole holder of the passwords to the exchange's cold wallets and that approximately $190M of customer funds were therefore irretrievable.

Forensic investigation by court-appointed monitor Ernst & Young told a different story. Examination of the cold-wallet addresses showed that the wallets had been emptied progressively throughout 2018 and were essentially empty by April 2018 — eight months before Cotten's death. Customer deposits had been used to fund Cotten's personal investments in property, vehicles and other assets.

The Ontario Securities Commission concluded in June 2020 that QuadrigaCX had been operating as a Ponzi scheme. Cotten's widow Jennifer Robertson settled with creditors in 2019, returning approximately $9M of inherited assets to the estate. Approximately 13% of customer claims have been distributed through the wind-up process, completed in 2024.