Last Updated: December 2025 | Word Count: ~6,800 | Reading Time: 27 minutes
Quick Facts
| Specification | Value |
| Exchange Name | QuadrigaCX |
| Status | ❌ Defunct – Fraud/Bankruptcy |
| Category | Cryptocurrency Exchange |
| Founded | November 2013 |
| Location | Vancouver, British Columbia, Canada |
| Collapsed | January 2019 |
| Founder | Gerald Cotten (reported deceased) |
| Missing Funds | C$215-250 Million (~US$170-190M) |
| Affected Users | 76,000-115,000 |
| Legal Status | Declared fraud by OSC, ongoing creditor proceedings |
Table of Contents
- Executive Summary & Overview
- Project History & Timeline
- The Founders
- How QuadrigaCX Operated
- Gerald Cotten’s Death
- The Missing Funds Investigation
- Fraud or Incompetence?
- Legal Proceedings
- The Mystery & Conspiracy Theories
- Lessons Learned
- Frequently Asked Questions
- Sources & References
Executive Summary & Overview
QuadrigaCX was once Canada’s largest cryptocurrency exchange, processing over C$1.2 billion in Bitcoin transactions during 2017 alone. Today, it serves as a cautionary tale about the dangers of centralized exchanges, inadequate oversight, and the devastating consequences when one person controls access to customer funds.
The exchange collapsed in January 2019 following the reported death of its 30-year-old founder and CEO, Gerald Cotten, who allegedly died from complications of Crohn’s disease while traveling in India in December 2018. Cotten was supposedly the only person who knew the passwords to access QuadrigaCX’s cold storage wallets containing customer cryptocurrency.
What followed was one of the strangest stories in cryptocurrency history:
- C$215-250 million in customer funds vanished
- 76,000-115,000 customers lost access to their assets
- The Ontario Securities Commission (OSC) concluded the exchange was a fraud
- Investigations revealed the “cold wallets” were largely empty long before Cotten’s death
- Cotten had operated fake accounts to trade against his own customers
- His co-founder had a criminal history for identity fraud
- Calls for exhumation of Cotten’s body have been made
The QuadrigaCX case raises profound questions: Was Gerald Cotten a victim of his own poor planning, or did he orchestrate one of history’s most audacious exit scams? Did he really die, or did he fake his death to escape with hundreds of millions?
Netflix’s documentary “Trust No One: The Hunt for the Crypto King” (2022) brought global attention to the mystery, which remains partially unsolved to this day.
Project History & Timeline
The Beginning (2013)
QuadrigaCX was founded in November 2013 by Gerald Cotten and Michael Patryn in Vancouver, British Columbia. The exchange launched its online trading platform in December 2013, positioning itself to serve the growing Canadian cryptocurrency market.
The timing was fortuitous. Bitcoin was gaining mainstream attention, and Canadian crypto enthusiasts needed a domestic exchange to avoid the complexities of international transfers.
Early Milestones:
- December 2013: Trading platform goes live
- January 2014: QuadrigaCX installs one of Canada’s first Bitcoin ATMs in Vancouver, raising the company’s profile
- 2014: Processes approximately C$7.4 million in Bitcoin transactions
Growth Period (2015-2017)
QuadrigaCX grew rapidly alongside the cryptocurrency market:
| Year | Bitcoin Volume | Growth |
| 2014 | C$7.4 million | Baseline |
| 2015 | C$15 million | ~100% |
| 2016 | C$50 million | ~230% |
| 2017 | C$1.2 billion | ~2,300% |
By 2017, QuadrigaCX was processing more cryptocurrency transactions than any other Canadian exchange, making it the country’s dominant player.
2015-2016: Failed Public Listing QuadrigaCX attempted to go public via a listing on the Canadian Securities Exchange, raising approximately C$850,000. The listing was ultimately abandoned, reportedly due to regulatory concerns—an early warning sign that went largely unnoticed.
Problems Emerge (2017-2018)
June 2017 – The ETH Loss QuadrigaCX announced a loss of Ethereum worth approximately US$14 million due to an alleged “smart contract error.” This significant loss strained the company’s finances and should have prompted closer scrutiny.
January 2018 – Bank Account Freeze The Canadian Imperial Bank of Commerce (CIBC) froze approximately C$28 million in accounts held by Costodian Inc., a payment processor linked to QuadrigaCX. CIBC cited concerns about the unclear ownership of the funds.
Throughout 2018 – Withdrawal Delays As cryptocurrency prices fell and customers sought to withdraw funds, QuadrigaCX experienced increasing delays:
- Fiat withdrawals taking weeks or months
- Customer complaints multiplied
- Support tickets went unanswered
- Trust in the platform eroded
The Collapse (December 2018 – February 2019)
| Date | Event |
| December 9, 2018 | Gerald Cotten reportedly dies in Jaipur, India |
| January 14, 2019 | QuadrigaCX publicly announces Cotten’s death |
| January 28, 2019 | Platform goes offline, halts operations |
| February 5, 2019 | Bankruptcy/creditor protection filed |
| February 2019 | Ernst & Young appointed as monitor |
The Founders
Gerald William Cotten (1988-2018?)
Background:
- Born 1988 in Ontario, Canada
- Became interested in technology and online ventures from a young age
- Involved in Bitcoin communities from early days
- Founded QuadrigaCX shortly after university
Public Persona: Gerald presented himself as a young crypto entrepreneur:
- Gave interviews about Bitcoin and security
- Spoke at cryptocurrency events
- Built QuadrigaCX into Canada’s largest exchange
- Appeared to be a legitimate businessman
What Wasn’t Known: According to later investigations by Ernst & Young and the OSC:
- Cotten had been misappropriating customer funds for years
- He created fake accounts to trade against customers
- He transferred customer crypto to his personal accounts on other exchanges
- He used funds for personal expenses including real estate
- The “cold wallets” he claimed to control were largely empty
Michael Patryn (Omar Dhanani)
The Hidden Identity: Michael Patryn, co-founder of QuadrigaCX, was not who he claimed to be. His real name was Omar Dhanani, and he had a serious criminal history:
- U.S. conviction for identity fraud
- Involvement in online money laundering forums
- Connections to questionable online ventures
Role in QuadrigaCX:
- Co-founded the exchange with Cotten
- Gradually stepped back from public involvement
- Distanced himself as scrutiny of his background increased
- Has largely avoided legal consequences from the collapse
Red Flag: A co-founder with a criminal history for fraud was a massive warning sign that investors and regulators failed to detect.
Jennifer Robertson – Cotten’s Widow
Background:
- Married Gerald Cotten in 2018, months before his reported death
- Became executor of his estate
- Initially portrayed as grieving widow who accidentally lost access to customer funds
What Investigations Revealed:
- Robertson benefited from assets purchased with misappropriated customer funds
- Properties, vehicles, and investments held in her name or through her companies
- Later reached a settlement with creditors returning approximately C$12 million in assets
Current Status: Robertson has consistently maintained she was unaware of Cotten’s fraudulent activities. Her settlement suggests authorities didn’t have evidence to charge her criminally.
How QuadrigaCX Operated
The Business Model
QuadrigaCX operated as a centralized cryptocurrency exchange:
- Customers deposited Canadian dollars or cryptocurrency
- The exchange held funds in custody
- Customers traded on the platform
- Withdrawal requests were processed from exchange reserves
The “Cold Wallet” Claim
QuadrigaCX claimed to use cold storage for customer cryptocurrency—keeping the majority of funds in offline wallets for security. According to the company:
- Gerald Cotten personally managed the cold wallets
- Only he knew the passwords/private keys
- This was presented as a security measure
The Reality: Ernst & Young’s investigation revealed the cold wallets were largely empty long before Cotten died. Customer funds had been:
- Transferred to Cotten’s personal accounts
- Used for margin trading on other exchanges
- Spent on personal purchases
- Used to pay withdrawals to other customers (Ponzi-style)
Fake Trading Accounts
One of the most damaging revelations was that Cotten operated fake accounts within QuadrigaCX:
- Created accounts under aliases
- Credited them with fake balances
- Traded against real customer orders
- Extracted real cryptocurrency from customers
The OSC estimated that C$115 million in losses came from this fraudulent trading activity alone.
Financial Structure
QuadrigaCX operated with minimal oversight:
- No board of directors with independent oversight
- No formal risk management systems
- No segregation of customer and company funds
- Reliance on external payment processors
- Single person (Cotten) controlling all critical systems
Gerald Cotten’s Death
The Official Story
According to the official account:
- Gerald Cotten traveled to Jaipur, India in December 2018
- He was staying at the Oberoi Rajvilas luxury resort
- He experienced complications from Crohn’s disease
- He suffered cardiac arrest
- He died on December 9, 2018 at age 30
- His body was cremated in India
Questions and Inconsistencies
The circumstances of Cotten’s death raised numerous questions:
Timing:
- Death occurred just as regulatory and liquidity pressures were intensifying
- QuadrigaCX was facing mounting withdrawal requests it couldn’t fulfill
Location:
- Died in India, a jurisdiction with different documentation standards
- Medical records have been questioned by some investigators
Will:
- Cotten had recently updated his will
- Jennifer Robertson was the primary beneficiary
- The will was signed just 12 days before his death
Insurance:
- Reports indicate Cotten had significant life and travel insurance
- Exact amounts and beneficiaries not fully disclosed
Medical History:
- While Crohn’s disease is serious, death at 30 from complications is unusual
- No independent verification of the medical circumstances
The Exhumation Debate
Some QuadrigaCX creditors have called for exhumation of Cotten’s body to verify:
- That the buried person is actually Gerald Cotten
- The true cause of death
- Whether death certificates are accurate
As of the latest reports, Canadian authorities have not conducted an exhumation, leaving this aspect of the mystery unresolved.
The Missing Funds Investigation
Ernst & Young Findings
Ernst & Young (EY) was appointed as monitor for QuadrigaCX’s bankruptcy proceedings. Their investigation revealed devastating findings:
Empty Cold Wallets: The supposed cold wallets containing customer cryptocurrency were found to be largely empty:
- Balances far below what should have been held
- Funds had been moved long before Cotten’s death
- “Cold storage” was essentially a fiction
Misappropriation: EY traced customer funds to:
- Cotten’s personal accounts on other exchanges
- Margin trading positions (many losing)
- Personal purchases and assets
- Payments to other QuadrigaCX customers (robbing Peter to pay Paul)
Blockchain Analysis: EY’s blockchain forensics showed:
- Customer funds moving to Cotten-controlled wallets
- Transfers to accounts on Kraken, Poloniex, Bitfinex
- Patterns consistent with years of fraud, not sudden mismanagement
Ontario Securities Commission Conclusions
The OSC released a comprehensive report in June 2020 concluding:
> “Quadriga was a fraud… Cotten’s activities constitute a fraud on QuadrigaCX’s customers.”
Key Findings:
- C$169 million in asset shortfall caused by Cotten
- C$115 million lost through fraudulent trading
- QuadrigaCX operated as an unregistered crypto asset trading platform
- The platform was effectively a Ponzi scheme in its final stages
Where Did the Money Go?
| Category | Estimated Amount |
| Fraudulent trading losses | C$115 million |
| Personal spending/assets | C$24+ million |
| Exchange trading losses | Unknown |
| Untraced | Significant |
Much of the missing cryptocurrency remains unaccounted for.
Fraud or Incompetence?
The Evidence for Fraud
Multiple factors point to deliberate fraud:
- Fake Accounts: Creating fictional accounts to trade against customers is clearly fraudulent
- Years of Misappropriation: The scheme ran for years, not days
- Personal Benefit: Cotten used funds for personal expenses
- Concealment: Fake “cold wallet” narrative hid the truth
- Timing of Death: Occurred as pressure mounted
The Counter-Argument
Some have argued Cotten may have been incompetent rather than purely criminal:
- He may have intended to repay funds through trading
- Poor risk management rather than malicious intent
- In over his head rather than masterminding fraud
The OSC’s Verdict
The OSC concluded unequivocally that Cotten’s conduct was fraud, not merely poor judgment:
- The deliberate creation of fake accounts
- Systematic extraction of customer funds
- Years-long pattern of deception
Legal Proceedings
Bankruptcy/Creditor Protection
- February 5, 2019: QuadrigaCX granted creditor protection in Nova Scotia
- Ernst & Young appointed as monitor, later trustee
- Claims process established for affected customers
- Assets identified and recovered where possible
RCMP Investigation
The Royal Canadian Mounted Police (RCMP) opened an investigation:
- Coordination with international authorities
- Examination of Cotten’s death circumstances
- Investigation into potential co-conspirators
- As of latest reports, no definitive conclusions announced
Creditor Recovery
Recovery for QuadrigaCX creditors has been limited:
| Source | Recovery |
| Residual cash | Limited |
| Recovered crypto | Limited |
| Jennifer Robertson settlement | ~C$12 million |
| Payment processor litigation | Ongoing |
| Total Recovery Rate | ~13-23 cents on the dollar |
Most customers have received only a fraction of what they deposited.
Class Action Lawsuits
Multiple class actions were filed:
- Against QuadrigaCX and its officers
- Against payment processors
- Against Ernst & Young (regarding speed of response)
Results have been limited given asset constraints.
The Mystery & Conspiracy Theories
Theory 1: Cotten Faked His Death
The most popular conspiracy theory holds that Cotten:
- Staged his death in India
- Used a body double or bribed officials
- Escaped with remaining funds
- Is living somewhere under a new identity
Evidence Cited:
- Convenient timing of death
- Death in jurisdiction with different standards
- Recent will update
- No independent verification
Counter-Evidence:
- Hospital records exist
- Death certificate issued
- Family held memorial service
- No confirmed sightings since
Theory 2: Cotten Was Killed
Some theorize Cotten may have been murdered:
- Co-conspirators silencing him
- Organized crime connections
- Someone who lost money seeking revenge
Evidence Cited:
- Large amounts of money create enemies
- Criminal underworld connections through Patryn
Counter-Evidence:
- No evidence of foul play in official records
- Body was examined before cremation
Theory 3: Hidden Bitcoin Wallets
Some believe substantial cryptocurrency remains hidden:
- Cotten had wallets that haven’t been found
- Assets will eventually move on-chain
- Watching known addresses for activity
Evidence Cited:
- Not all funds have been traced
- Blockchain analysis ongoing
Counter-Evidence:
- EY conducted extensive blockchain forensics
- Wallets likely emptied through trading losses
Netflix Documentary Impact
Netflix’s “Trust No One: The Hunt for the Crypto King” (March 2022):
- Brought global attention to the case
- Featured interviews with victims and investigators
- Explored conspiracy theories
- Highlighted amateur detective work by creditors
- Didn’t definitively resolve the mystery
Lessons Learned
For Cryptocurrency Users
1. Not Your Keys, Not Your Coins QuadrigaCX demonstrates why self-custody matters. When you hold cryptocurrency on an exchange, you’re trusting that exchange completely. Consider hardware wallets for significant holdings.
2. Research Exchange Leadership A co-founder with a fraud conviction (Patryn/Dhanani) was a massive red flag. Research who runs platforms you use.
3. Withdrawal Delays Are Warning Signs When exchanges delay withdrawals, it often signals liquidity problems. Don’t wait to withdraw if you notice delays.
4. Don’t Keep More on Exchanges Than Necessary Keep only what you need for active trading on exchanges. Move the rest to personal wallets.
5. Single Points of Failure Are Dangerous One person controlling all keys is a critical vulnerability. Legitimate custodians use multi-signature systems.
For Regulators
1. Crypto Exchanges Need Oversight The lack of regulatory oversight allowed QuadrigaCX to operate fraudulently for years.
2. Proof of Reserves Matters Requirements for audited proof of reserves could have detected QuadrigaCX’s shortfall.
3. Background Checks on Leadership Patryn’s criminal history should have been a disqualifier.
For the Industry
1. Professionalize Custody The QuadrigaCX disaster accelerated the push for regulated, institutional-grade custody solutions.
2. Transparency is Essential Regular audits and proof of reserves should be industry standard.
3. Multi-Signature Security No single individual should control customer funds.
Frequently Asked Questions
What was QuadrigaCX?
QuadrigaCX was a Canadian cryptocurrency exchange founded in 2013 that became Canada’s largest crypto trading platform. It collapsed in January 2019 following the reported death of founder Gerald Cotten, revealing that approximately C$215-250 million in customer funds were missing. The Ontario Securities Commission later concluded the exchange had operated as a fraud.
Did Gerald Cotten really die?
Gerald Cotten was reportedly declared dead on December 9, 2018, in Jaipur, India, from complications related to Crohn’s disease. While official death certificates and hospital records exist, some creditors and investigators have questioned the circumstances and called for exhumation of his body to verify his identity and cause of death. No exhumation has been conducted.
How much money was lost in QuadrigaCX?
QuadrigaCX owed approximately C$215-250 million (US$170-190 million) to between 76,000 and 115,000 customers when it collapsed. The OSC found that founder Gerald Cotten caused an asset shortfall of approximately C$169 million through fraud and mismanagement.
Was QuadrigaCX a scam?
The Ontario Securities Commission officially concluded that “Quadriga was a fraud” in its June 2020 report. Founder Gerald Cotten created fake accounts to trade against customers, misappropriated funds for personal use, and operated the exchange like a Ponzi scheme in its final stages.
What happened to Michael Patryn?
Michael Patryn (real name Omar Dhanani), who co-founded QuadrigaCX, gradually distanced himself from the company before its collapse. Despite having a prior criminal conviction for identity fraud, Patryn has not faced criminal charges related to QuadrigaCX. His current whereabouts and activities are not publicly known.
Can QuadrigaCX customers get their money back?
Recovery for QuadrigaCX customers has been limited. Creditors have received approximately 13-23 cents on the dollar through bankruptcy proceedings, settlement with Jennifer Robertson (~C$12 million), and asset recovery. Most customers will not recover their full losses.
What is “Trust No One” about?
“Trust No One: The Hunt for the Crypto King” is a Netflix documentary released in March 2022 that investigates the QuadrigaCX collapse and Gerald Cotten’s mysterious death. It features interviews with victims, journalists, and amateur investigators, and explores theories about whether Cotten truly died or faked his death.
Could Gerald Cotten have faked his death?
This remains an unresolved question. Factors supporting the theory include: the timing of his death as pressure mounted, death occurring in a foreign country, recent will update, and massive missing funds. However, no confirmed sightings have occurred, official documentation exists, and investigators haven’t found proof of staged death.
What lessons should crypto investors learn from QuadrigaCX?
Key lessons include: maintain self-custody of cryptocurrency rather than leaving it on exchanges, research the backgrounds of exchange leadership, treat withdrawal delays as serious warning signs, use hardware wallets for significant holdings, and never trust systems where single individuals control all access.
Is QuadrigaCX still operating?
No. QuadrigaCX permanently ceased operations in January 2019. The website is no longer functional, and the company is in bankruptcy proceedings. Ernst & Young serves as trustee, managing the distribution of whatever assets can be recovered to creditors.
Sources & References
- Ontario Securities Commission – “QuadrigaCX: A Review” (June 2020) – osc.ca
- Ernst & Young – Monitor/Trustee Reports – Various filings in Nova Scotia Supreme Court
- Netflix – “Trust No One: The Hunt for the Crypto King” (March 2022)
- Wikipedia – “Quadriga (company)” – wikipedia.org)
- CoinDesk – “The Story Behind QuadrigaCX and Gerald Cotten” – coindesk.com
Disclaimer
This article is for informational and educational purposes only. It does not constitute financial, investment, or legal advice.
Always conduct your own research (DYOR) and consider using self-custody solutions rather than leaving cryptocurrency on exchanges. LAB Blockchain Summit does not endorse any exchange or custody solution.
Article by: LAB Blockchain Summit Research Team Category: Expired Projects | Cryptocurrency Encyclopedia Tags: quadrigacx, gerald cotten, cryptocurrency exchange, crypto scam, trust no one, canada crypto