Quadriga: Another Crypto Scam?

User Cryptocurrency was not maintained exclusively in Quadriga’s hot and cold wallets. Significant volumes of Cryptocurrency were transferred off Platform outside Quadriga to competitor exchanges into personal accounts controlled by Mr. Cotten. It appears that User Cryptocurrency was traded on these exchanges and in some circumstances used as security for a margin trading account established by Mr. Cotten. Trading losses incurred and incremental fees charged by exchanges appear to have adversely affected Quadriga’s Cryptocurrency reserves. In addition, substantial amounts of Cryptocurrency were transferred to wallet holders whose identity the Monitor has been unable to confirm;

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The transactional analysis of the Exchange Accounts indicates the competitor exchanges received multiple forms of Cryptocurrency from Quadriga wallets from 2016 through 2019 including 9,450 bitcoin; 387,738 Ethereum and 239,020 Litecoin. Many of these holdings were converted into other Cryptocurrencies (primarily bitcoin). The conversion of User Cryptocurrency into other currencies through competitor exchanges resulted in incremental fees being incurred and currency exchange fluctuations relative to the original currency generating gains and losses. In addition, it appears that the activity in the Exchange Accounts resulted in overall trading losses.

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The Monitor also learned from one of the Exchanges that Mr. Cotten had established a margin account that traded various Cryptocurrencies extensively (67,000 individual transactions). The margin account trades involved multiple currencies including DASH, OMG, ZEC and DOGE among others which are not tradeable on Quadriga. The margin account trading activities were subject to substantial fees and generated substantial losses. As a result of the losses, the Exchange liquidated a significant portion of the Cryptocurrency in the account to satisfy the margin shortfall thereby reducing the net inventory of Cryptocurrency available to be returned to Quadriga.

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Grilled said:

Here's a wild report said to be from Ernst and Young

In it:

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43. In addition to preserving the AWS servers and data within the Platform, the Monitor also sought control over the internet domain name “quadrigacx.com” by writing to the internet domain name registrar. The domain name is not registered to Quadriga, however, the registrar has been advised of these insolvency proceedings.

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Grilled said:

QuadrigaCX.com under WHOIS Privacy @ internet.bs

Archive History of QuadrigaCX.com

First Archive Entry: https://web.archive.org/web/20140209101644/https://www.quadrigacx.com/

January 20th, 2019 -- last live Archive Erntry
https://web.archive.org/web/20190120204420/https://www.quadrigacx.com/

January 31st, 2019 -- Message from QuadrigaCX Board of Directors
https://web.archive.org/web/20190131221527/https://www.quadrigacx.com/

February 5th, 2019 -- Message from QuadrigaCX
https://web.archive.org/web/20190206064807/https://www.quadrigacx.com/

April 29th, 2019 -- Message from QuadrigaCX
https://web.archive.org/web/20190501124328/https://www.quadrigacx.com/

Eventually the domain starts forwarding to: http://www.quadrigacxtrustee.com/
https://web.archive.org/web/*/https://www.quadrigacxtrustee.com/ Registered at Amazon)

Additional Reads:

QuadrigaCX FaceBook (read the comments) https://www.facebook.com/quadrigacx

QuadrigaCX Twitter (also read the comments) https://twitter.com/quadrigacoinex

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xynames said:

Cryptoqueen: How this woman scammed the world, then vanished
https://www.bbc.com/news/stories-50435014
https://www.bbc.com/news/stories-50435014
https://www.coindesk.com/jury-convicts-crypto-ponzi-scheme-onecoins-lawyer-on-fraud-charges

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