Quadriga Crypto Mystery Deepens With ‘Cold Wallets’ Found Empty
bloomberg.com
bloomberg.com
That is, I don't think it's an exit scam, I think it's a desperate attempt to hide a massive failure in running the exchange. The "we can't access the cold wallets any more" was intended to be a believable excuse that would explain why they couldn't return people's money.
In any case these schemes are hard enough to pull off that eventually I imagine we'll find out. Though $250M is right in the valley of interest to the cops: small scale (<$1M and <$10M) and very large scale (Madeoff, Stanford) both of which get press.
On top of that, the Canadian government locked up a portion of their funds right around the time they started to experience withdrawal problems.
Makes sense to me.
...then compound those losses by taking on a series of ever more risky bets in an attempt to win it back. At least that's the usual way of how gambling ruins people.
"a sixth appears to have been used to receive Bitcoin from another cryptocurrency exchange"
Customers doesn't directly transfer funds to cold wallets (if they were they would be much easier to identify) and there's very little other reason to intermingle customer funds with proceeds from trading on other exchanges.
In further goings on it seems:
>The co-founder of troubled cryptocurrency exchange QuadrigaCX is a convicted felon who served time in the United States for his role in an online identity-theft ring
'Michael Patryn', who changed his name and had a nose job https://outline.com/TdWDgM
My guess is Cotten died and the latter is trying to keep the money
It seems like they saw apparently valid records and a doctor confirmed that he witnessed Cotten die. That doesn't seem especially compelling - what else would the doctor say? "No, I lied and forged his death certificates in exchange for money. Please end my medical career and send me to prison."
What is compelling is that the 5-star hotel where Cotton and his wife were staying, the hospital where he was treated, 2 members of the police department that reviewed the case, and the mortuary where he was embalmed, all confirm Cotton's death.
That would be a pretty elaborate staged death -- not impossible, but still the evidence provided in the article clearly points to Cotton having died suddenly and unexpectedly in India.
So what you're saying is that this "Mr. Cotten" (almost certainly not Indian given the surname), magically appears on death's doorstep at the hospital and promptly dies the next day.
It's so far outside the realm of possiblity, but perhaps Cotton and his wife went to a local cafe frequented by tourists; found a similarly baby faced looking Northern European male with light colored hair and blue eyes; offered him a large sum of cash to "drink this potion that will make you temporarily ill, but only for 24 hours, trust us". Together they walk to the local fake ID shop and do the necessary; then "Cotton" and his "wife" check in at the 5-star hotel and proceed with the plan (drink potion, get sick, go to hospital, but oh noes, "Cotton" dies!).
The real Cotton then visits a local plastic surgeon to get that Brad Pitt look he's always wanted, and slips off to a remote tropical island to lay low until his wife can extricate herself from all the unwanted attention she's getting back home -- when the dust settles she rejoins him in their happily ever after, lifestyles of the rich but not famous, world travels.
...More likely, Cotton is simply stone cold dead.
I was responding to the statement that questioning the doctor was essentially useless when looking into the possiblity that Cotton faked his death, as either he did indeed die or the doctor was part of the scheme. I was pointing out that there is value in talking to the doctor, as there are possiblities that don't require the doctor to be complicit.
If you've decided investigating the matter is worth your time, you may as well do it properly is all. Doesn't mean I think it's what likely happened.
All kinds of folks living at the top of the crypto pyramid have a rich checkered past. Look at esteemed former US citizen Roger Ver--convicted felon for mailing explosives. Then you've got Charlie Shrem, a convicted felon who was helping launder money. You've got Mark Karpeles, who was convicted in Japan for all kinds of shit. Lets not forget bitcoin developer Luke Jr -- who is a rather.... interesting.... fellow.
Name "spokesperson" for bitcoin and they'll have a rather sketchy history. I cannot name a single person at the top of the bitcoin food chain that is a "normal person".
I'll bite. What's the dirt on Andreas Antonopoulos?
Though I don't agree that there is no "normal person". Look at everyone at Blockstream (including Adam Back), people behind Ethereum, most old core devs (Gavin, Mike, etc).
Keep in mind that Bitcoin is very much cypherpunk (especially in the early days before 2013): even Neo from the Matrix was a criminal before he got plugged out. Building a new wild west of digital money is of course going to attract certain type of people.
That doesn't mean it's a scam. The US we know today was build on top of the "new frontier", and not all people were as clean as a whistle back then. The current trends in consumer tech come from Apple, a company that started with a system to hack long distance call infrastructure (blue box).
I'm not disagreeing with your more constrained claimed regarding Bitcoin and criminality, it was the broad claim of spookthesunset that I found ridiculous (which you seem to as well, perhaps for slightly different reasons -- I didn't really even want to poke at the term "normal person," given that the sort of people who work on cryptographic-Rube-Goldberg-machines aren't exactly normal by all standards, and that's okay, it's just a lot to unpack and not what spookthesunset was really getting at).
In retrospect, I do feel like I should have quoted less from spookthesunset.
Given that Cotton and his wife were in India largely for their honeymoon (and secondarily to celebrate the opening of the orphange they in part funded), it's highly unlikely that his former business associate would have traveled to India with them. If you read the 2nd linked article Patryn claims that he left the company around 2016 after a falling out.
"Mr. Cotten’s money, however, did not buy an orphanage. It bought materials, but Mr. Cherukupalli had to arrange the construction himself. And the materials were insufficient – there was enough for walls and furnishings, but not enough.... Mr. Cherukupalli began to accumulate more debt as he secured labour and additional materials."
If I were to have unrestricted access to $250M and woke up on the wrong side of the bed one day (or just a bad day in traffic, even) it would take little to flip a switch in my head and think, to Hell with all this, let's skedaddle! However, I am way too much of a paranoiac to do this without absolutely ruining my QOL after the fact, hah.
I suppose situations like this is why we have the Two-man Rule for nuclear launches, &c. Keep those delusions in check!
You would think, right?
Most suspicious element of the whole case was the claim that he died from Crohn's disease (a condition that has a 3% mortality rate) and the lack of a body. WHERE IS THE BODY? I call b.s. Cotten is alive
I've been to India numerous times, and have had dysentery a few times. Once was pretty bad, essentially rendering me bed (and toilet) - ridden for a couple of days. Never once would I have considered seeking medical attention for it. Unless you're vulnerable for some reason, I'm not sure anything can really be done about it.
Many travelers in remote locations carry the antibiotics with them, just in case. I'm writing this from remote Thailand; in the bottom of my first-aid kit is a small bag with Ofloxacin, Imodium, and oral-rehydration salts - just in case.
Imodium I get, but I've honestly never heard of carring antibiotics around while travelling, and I've travelled a good portion of the world. Antibiotics are controlled in many (most?) countries too, so here in the UK I couldn't do this even if I wanted to (I don't)
Mmm, I think the originating country of the traveller has a lot to do with it. From the US, I wouldn't guess it's particularly common, but it's not unheard of [1].
Can certainly understand your hesitancy. I hope to return with them unopened and unused. Resistance aside, the risk of C. difficile among others is a serious trade off.
In my case, I have enough known antibiotic allergies that a remote Dr might have problems prescribing around them.
https://en.wikipedia.org/wiki/Dysentery#Bacillary_dysentery
In any case, she was prescribed a single dose of a large pill for treating both amoebic and bacillary dysentery, so we're still not sure which one it was, but she was back up on her feet less than a day later.
Obligatory: https://knowyourmeme.com/memes/you-have-died-of-dysentery
from the Globe article
>[Cotten's wife with the body] landed in Toronto and flew back to Halifax on Dec. 11, where a funeral service was held on Dec. 14.
Then apparently cremated in Halifax...
Actually no one knows the lifetime and annual mortality rates very well:
https://www.newsbtc.com/2019/02/06/ceo-who-held-150m-in-cryp...
>Crypto exchange Kraken is offering up to $100,000 to anyone who can help solve this year’s biggest blockchain mystery: what happened to QuadrigaCX’s coins? (https://www.coindesk.com/kraken-exchange-offers-100k-reward-...)
I don't claim to know anything about blockchain tech but I have been exposed to the hype around it and the mystery for me is why anyone wouldn't have cashed out long ago.
I expect the real sharks have cashed out a long time ago.
https://bitcoincharts.com/charts/krakenUSD#rg730ztgSza1gSMAz...
I was originally planning to end this post with "or just making up some numbers", but since GP was writing of a joke investment, active gambling seems to be a reasonable assumption. And putting in 50£ in a toy account (and never extending it with fresh money), leaving with 18 after years, that also doesn't seem like an unreasonable thing to do. That's lower stakes than meeting for an amicable 2£ per player poker night once a month. If the stated goal of a joke investment is a dividend in entertainment, then passive is a terrible investment strategy.
...is she not his heir? What's happening there?
Yes, I lost $15,000 — but if you’re going to lose money on a budgeted, high risk investment, it’s great to do so embroiled in the strangest of human/technical dramas. I am loving it.
The IRS will accept it since the company is bankrupt.
Edit: We're all joking, but you should tax writeoff the stuff. You can't exactly exercise your losses, so this will be game over. Be aware this makes you illegible for future bankruptcy proceeding.
A quarter of a billion dollars...
Given crypto's history, I have no idea why anyone would even consider such a thing.
Seems highly improbable that his death was staged, there would have had to have been several separate organizations all in on it -- if the reporting is accurate, he's dead, the mystery is where is the $200+ million.
Alternatively, do we know what happened to the real money bank accounts of Quadriga?
1) https://www.reddit.com/r/BitcoinCA/comments/avzh7s/community...
2) https://www.reddit.com/r/BitcoinCA/comments/ar86lf/report_sh...
The irony is many of the people into bitcoin are the kind of people who think tax is theft and the government should get out of everything in their life.
... right up until they suffer a personal financial loss. Then it is up to the government to make them whole....
I'm very much not a libertarian (or anarchist, or anything in that vicinity) but this is unfair. We all have to work within the existing structures of power; we can't just pretend that things are currently working the way they would in our utopia.
We'll see how it works out.