QuadrigaCX Officially Labeled a Ponzi Scheme

QuadrigaCX was a fraud: that's the conclusion reached by the Ontario Securities Commission (OSC) regarding the Canadian exchange following the alleged death of its founder Gerald Cotton.

For those who don’t remember the events of last year, we’re talking about a case that could be made into a movie: the exchange’s founder was actually missing for a long time and then pronounced dead in India, where he had traveled several months earlier for treatment of an alleged illness.

Only Cotton held the personal keys to the various cold wallets, so it was impossible to move the funds after his death. At the time, users accessing the platform could only see a screenshot of a maintenance routine on an emergency server.

That’s when the truth emerged: not only were customer funds not safe, but they were being used by the founder for questionable operations.

In fact, the funds were found on other exchanges, leading to doubt as to whether they were actually lost or cleverly moved before the founder staged his death.

Continuing the analysis of the transactions made by the founder, it was also discovered that he used other clients’ funds to cover losses: they were used to pay other users thus giving the impression that the platform had no problems.

The exchange then declared bankruptcy with a loss of over $190 million and legal costs of just under $2 million.

Of all that, only $25 million has been recovered, which will be used to compensate over 70,000 users who were victims of a scam created by an unscrupulous man who may have even faked his own death.

Author

Alexander Stefanov

Reporter at CoinsPress

Alex is Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.