[2019-02-06] Locked bitcoins in QuadrigaCX might be another exit scam.

[figmentofmyass]

However, why was QuadrigaCX sending 600k ethereum from cold storage to different exchanges? Why do that? I reckon this has already occured before the banks have frozen their accounts.

let's assume they were insolvent. in this situation, their entire operation depends on the inflow of crypto deposits. if they needed to cover USD or CAD or LTC withdrawals and didn't have the funds available, they could send BTC or ETH etc to kraken or binance, sell it and send back the proceeds to process customer withdrawals. if customer withdrawals were shut down entirely, the jig would be up pretty quickly.

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[bbc.reporter]

That might be correct. It is also possible that the bitcoin news media has been releasing clickbaits after clickbaits for our entertainment and their own interests hehe.

However, I still reckon that there might be more to the story. There is always more behind every story in the cryptospace hehehe.

[dreamhouse]

scary on what is going on, waiting for more information on it. In anyway the bitcoin fund management there seems suspicious.

[bbc.reporter]

News update.

@figmentofmyass. QuadrigaCX appears more revealed to be the moneylaundering part of a criminal operation as more details are being uncovered about this story hehehe.


Omar Dhanani

Quadrigacx Co-Founder Michael Patryn Is Actually Convicted Fraudster Omar Dhanani

While Dhanani, now known as Patryn, refused to comment on the matter, Bloomberg claims to have obtained records that confirm the man’s criminal past and his changing of names twice, in 2003 and 2008. Patryn co-founded troubled Canadian exchange Quadrigacx with the late Gerald Cotten in 2013.

Quadrigacx Co-Founder Michael Patryn Is Actually Convicted Fraudster Omar Dhanani
Omar Dhanani a.k.a Michael Patryn
He allegedly changed his name from Omar Dhanani to Omar Patryn with the British Columbia government in March 2003. The news agency reported that in 2008, Dhanani became known as Michael Patryn, having registered a new name in the same Canadian province.

In the U.S., Dhanani had been charged with several crimes, including pleading guilty to conspiracy to commit credit and bank card fraud in 2005, Bloomberg noted, quoting a statement from the U.S. Justice Department. He was just 22 years old at the time. Dhanani allegedly operated a website called shadowcrew.com, now defunct, peddling 1.5 million stolen credit and bank card numbers, claims the article.

Read in full https://news.bitcoin.com/quadrigacx-co-founder-michael-patryn-is-actually-convicted-fraudster-omar-dhanani/

Also, this is a clearer written article about the whole story.

https://www.crypto-news.net/quadriga-mystery-deepens-as-auditors-discover-cold-wallets-to-be-empty/

[bbc.reporter]

Another news update.

Whatever QuadrigaCX was, it is becoming clearer after every news update that it was not functioning only as an exchange. It was also something else. If it is proven true for QuadrigaCX, we can assume that it might be true for many of the other exchanges.



In a recent article published on CoinDesk, Christine Duhaime – a regulatory attorney in Canada who was hired by the exchange for a short period of time in 2015 – explained that Cotten was guiding his exchange down a precarious path long before his death.

Duhaime noted that her time at the company came to an abrupt end shortly after Cotten decided that he no longer wanted the exchange to be a listed company, which was directly proceeded by him firing all the employees that were, in his mind, “law and order” people.

“Gerald Cotten made the decision that he no longer wanted QuadrigaCX to be a listed company. On that day, he terminated the professionals that were, in his mind, the ‘law and order’ folks – the accountant, the auditor and me, the regulatory attorney,” she explained.

Furthermore, after this occurred, Duhaime explains that Cotten began running the exchange as if it has “no investors, no shareholders, no regulatory agencies and no law that applied to it – no corporate law, no securities law, no anti-money-laundering law and no contract law.”

Read in full https://www.newsbtc.com/2019/03/28/former-quadrigacx-attorney-claims-crypto-exchange-was-sent-down-path-of-lawlessness/

[joniboini]

Wow, what a shock. Seems like the exit scam notion is becoming more and more plausible to explain their situation. The next one should be Bitfinex (Cryptocapital can't hide any longer).

[dunfida]

Another news update.

Whatever QuadrigaCX was, it is becoming clearer after every news update that it was not functioning only as an exchange. It was also something else. If it is proven true for QuadrigaCX, we can assume that it might be true for many of the other exchanges.

Theres no secret that can really be hidden forever. Truth would come out no matter what and as the day has passed out these updates do proves out on most peoples doubts about on this mysterious death of Cotten.

[bbc.reporter]

News update.

The FBI has begun collecting information from QuadrigaCX's victims. Why the FBI? It might be as I speculated. There are exchanges in the cryptospace that are created and used by a global money laundering ring.



A press release published earlier this week showed the Federal Bureau Investigation (FBI) are on the Quadriga case now, investigating the exchange, which filed for bankruptcy following the death of Cotten.

The FBI have published a questionnaire for victims, asking for personally identifying information, contact information and details about their QuadrigaCX accounts.

Source https://cryptodaily.co.uk/2019/06/quadrigacx-victim-the-fbi-needs-your-help

FBI questionaire https://forms.fbi.gov/seeking-victims-in-the-quadrigacx-investigation

[figmentofmyass]

News update.

The FBI has begun collecting information from QuadrigaCX's victims. Why the FBI? It might be as I speculated. There are exchanges in the cryptospace that are created and used by a global money laundering ring.

it's not just the FBI. it looks like a joint investigation with the DOJ and US attorneys office. and also the IRS---wonder why they're involved. serious business!

this may just be because quadrigacx served USA customers and left them in the lurch. the FBI does investigate money laundering cases, but the issue here is probably corporate fraud---false accounting, misrepresentation of financial condition, fraudulent trades---that caused major losses to investors.

[bbc.reporter]

@figmentofmyass. Do not leave the taxman out of the fun hehehe. Also, remember that it was tax evation that put Al Capone into imprisonment, not all his heinous crimes committed in his lifetime. No one escapes the taxman hehehehe.

[amishmanish]

--snip--
 Totally agree with figmentofmyass:

Totally agree with figment-of-my-ass too. It has a way of knowing when something is wrong..no pun intended!

[semifamou5]

Does everyone remember the story of QuadrigaCX's founder, who was claimed to be the only person in control of the exchange's cold wallet, died in India on December, 2018? There are new stories surfacing that the people left running the exchange are using the founder's death to exit scam.

We might begin witnessing more small exchanges doing exit scams if the bear market extends out longer.

Also, do not trade in small and unknown exchanges.

https://3xz7gj47vd1t2zgr1q19hmwl-wpengine.netdna-ssl.com/wp-content/uploads/2018/11/scam.jpeg
Quadriga's motto

The Canadian exchange claims it has lost access to $145 million of digital assets due to its founder’s death, however, it is likely that QuadrigaCX never had this money.

QuadrigaCX, the largest Canadian cryptocurrency exchange in terms of trade volume, has recently grabbed the headlines due to its controversial insolvency. It filed for creditor protection after the sudden death of the company’s founder and CEO Gerald Cotten, which had led to the liquidity crisis.

The explanation for this was rather extraordinary. It turned out that Cotten was the only person who controlled all private keys to the cold storage wallets where QuadrigaCX used to hold almost all of its funds. As a result, QuadrigaCX had to confess it failed to locate or access about $145 million in various digital assets.

At first, humanity prevailed. After all, Cotten was only 30 years old, and he went to India with a charitable goal to open an orphanage where he died. Meanwhile, his widow has been reportedly receiving threats from the clients of the exchange, who are furious and learning a tough lesson of the golden cryptocurrency rule, ‘not your keys, not your coins.’

Notably, Jesse Powell, the head of the Kraken exchange, which is one of the largest and most influential exchanges, also shares these views. In his latest post on Twitter, he touched on issues of witnesses, identity verification, and credibility of a death certificate. He is ready to share some insider information with Canadian authorities if the need arises. bitcoin loan


Besides the above-mentioned $145 million in digital assets, the exchange also owes its users more than $50 million in fiat currency, according to the court filing. The fiat issues started because of a legal dispute between QuadrigaCX and the Canadian Imperial Bank of Commerce (CIBC), which last year froze multi-million accounts linked to Costodian Inc., one of Quadriga’s payment processors. There were also problems with Billerfy and WB21, two more payment processors working with Quadriga and are holding part of its funds.

In this regard, Powell claimed the entire case looked very much like an exit scam. He cites the suspicious combination of recent developments, including sudden disappearance of the founder after fiat problems and high withdrawals.

To make things worse, a respected crypto industry researcher, Crypto Medication, published a comprehensive blockchain analysis of Quadriga’s addresses and transactions. Based on its findings, the experts concluded that QuadrigaCX did not have as much Bitcoin as it claimed on the affidavit which it submitted to the Canadian court.

Even worse, the researchers revealed that the exchange had no identifiable cold wallet reserves. Instead, it used one client’s deposits to fund another client’s withdrawals. This explains the occasional delays in withdrawal execution, as sometimes QuadrigaCX did not have enough liquid funds at its disposal.

Read in full https://beincrypto.com/quadrigacx-saga-human-tragedy-or-yet-another-exit-scam/

ahhh not this again

[Sithara007]

Ever since I first heard about Gerald Cotten's death, I was suspicious about the whole episode. And now everything seems to have confirmed, with the involvement of the criminal fraudster Omar Dhanani revealed now. Hopefully the victims may be reimbursed at least a part of their hard earned money. But the most frustrating thing is that the entire legal course can take many years and by the time when the investors get back their coins, it will be too late for many of them.

[bbc.reporter]

News update.

The truth will always come out and it has regarding to what has occured behind QuadrigaCX's closure. This is also embarassing, Gerald Cotten's wife was telling the media that his husband had a good heart by covering customer withdrawals from his own bank account. He was using customer deposits to speculate in other exchanges, however.

I reckon the next step in the investigation is to look for more evidence of his death. Is he really dead hehehe? He died in a region in India where the fake death syndicates are located.


Ernst & Young revealed that QuadrigaCX, a failed Canadian crypto exchange that lost almost $190 million of its users funds, may have committed fraud. Auditors found that the exchange’s late founder and CEO transferred user funds off QuadrigaCX and used them for margin trading on other exchanges, losing millions.

Read in full https://cryptoslate.com/quadrigacx-ceo-lost-21000-bitcoin-customer-deposits/

[bbc.reporter]

News update.

QuadrigaCX's affected users will not accept death as Gerald's Cotten escape hehehe. However, it is very suspicious that he died in a place in India where the syndicates there are experts in faking deaths according to some articles.



A letter sent by law firm Miller Thomson to the Royal Canadian Mounted Police (RCMP) asks for the authorities to dig up and examine the body of Gerald Cotten, who reportedly died of complications due to Crohn’s disease at the end of December 2018. Cotten was 30 at the time.

“The purpose of this letter is to request, on behalf of the Affected Users, that the Royal Canadian Mounted Police (the ‘RCMP’), conduct an exhumation and post-mortem autopsy on the body of Gerald Cotten to confirm both its identity and the cause of death given the questionable circumstances surrounding Mr. Cotten’s death and the significant losses of Affected Users,” the letter reads.

Source https://www.coindesk.com/request-for-exhumation-quadrigacx-creditors-ask-for-proof-that-cotten-is-dead

[bbc.reporter]

News update.

It appears that another lesson was learned that we should not readily give our personal and private information to exchanges and other cryptocoin services.

QuadrigaCX users, you should await a visit from the the tax collectors hehehehe.



One of the biggest fears of cryptocurrency traders is losing control of their personal information. And that fear has become a reality for QuadrigaCX former users.

Ernst & Young, the trustee overseeing the bankruptcy case for the failed Canadian crypto exchange, will be turning over all of Quadriga’s user info and data to the country’s tax collector.

Read in full https://amycastor.com/2020/03/27/bankruptcy-trustee-to-hand-over-all-quadrigacx-user-data-to-canadas-tax-collector/

[squatter]

QuadrigaCX users, you should await a visit from the the tax collectors hehehehe.

One of the biggest fears of cryptocurrency traders is losing control of their personal information. And that fear has become a reality for QuadrigaCX former users.

Ernst & Young, the trustee overseeing the bankruptcy case for the failed Canadian crypto exchange, will be turning over all of Quadriga’s user info and data to the country’s tax collector.

They are rubbing salt in the wounds now, coming after the victims. Imagine QuadrigaCX stealing or losing all your account value, and then getting slapped with a CRA tax enforcement on top of it.

This is yet another reminder not only to minimize the funds you keep on exchanges, but to avoid KYC at all costs. You can never trust exchanges to protect your data.

[o_e_l_e_o]

What an absolute mess.

I am sure that there are a lot of people who lost money on Quadriga, both from the falling price of bitcoin at the time followed then by their exit scam, who did not declare that on their taxes. I would also guess that there are many of them who have never declared any crypto related activity on their taxes. We saw the same thing when Coinbase handed over the details of 13,000 customers to the IRS.

Because the CRA also classifies any fiat-to-crypto, crypto-to-fiat, or even crypto-to-crypto trade as a taxable event, there will be a lot of people who are going to end up with tax bills for money they don't have, money that was stolen from them. That's going to be a kick in the teeth for sure.

Don't use centralized exchanges.

[gentlemand]

Because the CRA also classifies any fiat-to-crypto, crypto-to-fiat, or even crypto-to-crypto trade as a taxable event, there will be a lot of people who are going to end up with tax bills for money they don't have, money that was stolen from them. That's going to be a kick in the teeth for sure.

Don't use centralized exchanges.

The article says Quardriga didn't keep any books. They're handing over the full database they have but that info might be garbled and meaningless. I don't see how they can bill you without a full rundown of everyone's moves.

Hopefully they won't have enough evidence to make anyone's life difficult and this should be a lesson to the rest of us.

[o_e_l_e_o]

Hopefully they won't have enough evidence to make anyone's life difficult and this should be a lesson to the rest of us.

If the CRA are anything like the IRS, they won't need enough, or pretty much any, evidence to make your life hell. If your name is on the list that is handed over, and you haven't declared crypto on your taxes, you can bet your bottom Canadian dollar that they will be coming after you, auditing you, harassing you for breakdowns of all the trades you made, etc. Since you won't exactly be able to access that information from Quadriga, if you haven't kept exact records (and I imagine most haven't), there will be a lot of people filing amended tax returns filled with guesswork.