Exchange

The CEO of QuadrigaCX Fraudulently Used Customers Funds, Says Report

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QuadrigaCX, the controversial cryptocurrency exchange of Canada, has again got trapped into another storm of fire. It is found they have been using the ‘user’s cryptocurrency deposited in the exchange miss-appropriately.

It seems the exchange has failed to maintain the simple business ethics to manage the ‘user’s funds, ‘company’s funds, and financial accounts appropriately. In short, we can say QuadrigaCX was operating the cryptocurrency exchange fraudulently.

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As per the fifth report of monitor published on 19th June by the Nova Scotia Court, it was found that the CEO of the exchange used his position to exploit users’ funds to make false deposits and trades. He even had withdrawn ‘user’s digital currencies to his accounts.

It was also found that the exchange did not maintain ‘user’s cryptocurrency into any hot or cold wallet as done by prominent exchanges. Instead, it used to send the major percentage of the fund out of the platform to some other exchanges, and the entire process was controlled by Lt. Gerald Cotten.

It was earlier reported that Mr. Cotten had passed away in Jaipur, India. It seems the exchange CEO has left a big money mystery behind him, which has no signs of getting resolved any time sooner. The exchange owes190 million USD to its customers, but it was already declared itself as bankrupt. They have told the customers that $190 million worth cryptocurrency was stored in cold storage that became inaccessible with the death of Mr. Cotton.

FBI had stepped into to investigate into the matter. Previously WSJ had claimed that almost all the ether that was held by QuadrigaCX was moved to ShapeShift another cryptocurrency exchange that does not follow AML rules till last year. The associated wallets of QuadrigaCX exchanged ether into BTC and other virtual assets and transferred them to some separate addresses.

It seems that the real story behind the bankruptcy of Quadriga is yet to unfold. The exchange might have already collapsed even before the death of its CEO and has slowly transitioned into the bankruptcy stage.

Roxanne Williams

Roxanne Williams has recently joined as a market reporter for CryptoNewsZ - the 24/7 crypto news site, where she produces recent stories, technical analysis and price updates on world's leading cryptocurrencies.

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