QuadrigaCX: The Dead CEO's Missing $190 Million

On 14 January 2019, QuadrigaCX, then Canada's largest cryptocurrency exchange, posted a notice on Facebook. Its 30-year-old founder and chief executive, Gerald Cotten, had died the month before in Jaipur, India, of complications from Crohn's disease, while travelling with his new wife, Jennifer Robertson. The post asked for privacy. Within two weeks the exchange had stopped paying anyone.

The reason, Robertson said in a sworn affidavit filed with the Nova Scotia Supreme Court on 31 January 2019, was that Cotten alone held the passwords to the exchange's cold wallets. A cold wallet is crypto stored on a computer that never touches the internet, the digital version of a bank vault with a single combination. Robertson said she had searched his laptop and papers and found nothing written down. The exchange owed its customers about C$250 million, roughly US$190 million at the time, in cash and crypto.

It was a remarkable story. Almost none of it held up.

The vault was empty

An exchange is crypto's version of a stock broker: customers deposit money, buy and sell through it, and trust it to hold their coins. QuadrigaCX was founded in Vancouver in November 2013 by Cotten and Michael Patryn, and by 2018 it was the main place ordinary Canadians bought bitcoin. It had no proper bank account, used outside payment processors to move cash, and kept no formal accounting books. In January 2018 the Canadian bank CIBC froze accounts held by one of those processors, tying up millions of dollars of customer money in a court fight. Withdrawals had been slow for most of that year.

On 5 February 2019 Justice Michael Wood of the Nova Scotia Supreme Court granted the exchange creditor protection under the Companies' Creditors Arrangement Act, a pause on lawsuits much like Chapter 11 in the United States, and appointed the accounting firm Ernst & Young (EY) as monitor. EY soon found that the famous cold wallets were not locked vaults full of money. Five cold wallet addresses it identified had been empty since April 2018, eight months before Cotten died. Days into the process, the exchange also admitted it had accidentally sent C$468,675 of bitcoin to a cold wallet nobody could open. On 8 April 2019 QuadrigaCX was put into bankruptcy, with EY as trustee.

The lost passwords had not locked up the money. They had covered for the fact that most of it was no longer there.

What the regulator found

In June 2020 the Ontario Securities Commission (OSC), the province's stock market regulator, published the result of a ten-month review by its enforcement staff. Its conclusion was blunt: the collapse was caused by fraud committed by Cotten, and QuadrigaCX had operated like a Ponzi scheme, using new customers' deposits to pay the withdrawals of older ones.

The OSC said more than 76,000 clients were owed C$215 million, and that at least C$169 million of that was lost. About 40 per cent of the clients lived in Ontario. Most of the loss, around C$115 million, came from Cotten's own trading on the exchange. He opened accounts under false names, credited them with balances of cash and crypto that did not exist, and used those fake balances to trade against his own customers. When prices moved against him, real client money covered the gap. He lost a further C$28 million or so trading customers' crypto on other exchanges without permission, and, the OSC said, used client money to fund a lavish lifestyle.

The regulator added that it would likely have brought enforcement action against Cotten and the company, but that there was no practical point: he was dead and QuadrigaCX was bankrupt. Its findings were staff conclusions, never tested before a tribunal or a court. Nobody has been charged with a crime over QuadrigaCX.

The body, the widow and the documentary

Cotten's death was the part that refused to settle. The Indian death certificate misspelled his name. He had signed a new will on 27 November 2018, less than two weeks before he died, leaving his estate of about C$9.6 million to Robertson. He was buried in Halifax, Nova Scotia, after no autopsy.

On 13 December 2019, Miller Thomson, the law firm appointed by the court to represent QuadrigaCX's users, wrote to the Royal Canadian Mounted Police (RCMP) asking it to exhume the body and carry out a post-mortem to confirm both who was in the grave and how he died. The RCMP declined to comment, citing its investigation. No result of that request has ever been made public.

Robertson said she knew nothing about how her husband ran the exchange. In October 2019 she agreed to hand EY most of what she owned, about C$12 million in cash, investments, real estate, vehicles, a boat and a Cessna aircraft, because the assets had come from QuadrigaCX at Cotten's direction. She kept personal items, her wedding ring, a car and a small amount of savings.

On 30 March 2022 Netflix released "Trust No One: The Hunt for the Crypto King", a documentary following users who had spent years trying to work out where their money went, and whether Cotten was dead at all. It made the theory that he faked his death famous. No evidence has emerged that he did.

The co-founder and the gold bars

Michael Patryn, the other founder, said he left QuadrigaCX in 2016. In January 2022 the on-chain investigator known as ZachXBT revealed that "0xSifu", the treasury manager of the decentralized finance project Wonderland, was Patryn, and that Patryn had earlier been known as Omar Dhanani, who served a US federal prison sentence for his part in the Shadowcrew identity theft and card fraud ring. Wonderland's founder, Daniele Sestagalli, admitted he had known, and Wonderland's members voted Sifu out.

In June 2021 the RCMP had already emptied Patryn's safety deposit box at a CIBC branch in downtown Vancouver: C$250,200 in cash, 45 gold bars, four luxury watches and jewellery. British Columbia's Director of Civil Forfeiture sued to keep the haul in June 2023, and in March 2024 filed an unexplained wealth order, a court demand that he prove the property was obtained legally. Court filings cited 2014 and 2015 chat logs between Cotten and Patryn that, according to the director, show the two discussing stealing from the exchange and staging Patryn's departure. Patryn denies the assets are proceeds of crime, denies being a co-founder, and argues police breached his rights under the Canadian Charter of Rights and Freedoms. The case had not been decided in any public ruling found for this article.

Thirteen cents on the dollar

EY recovered or identified about C$46 million to pay back users, a sum that includes Robertson's assets. In May 2023, more than four years after the collapse, it paid an interim distribution: 13.09 per cent of each proven claim. There were 17,648 claims worth about C$303 million in total, valued at crypto prices on 15 April 2019, and the payout came to about C$39.5 million. Anyone whose bitcoin had been sitting on QuadrigaCX received a share of its April 2019 dollar value, not the coin, and bitcoin has since risen many times over.

The rest of the trustee's cash was held back to cover the costs of the bankruptcy, with a final distribution promised for later. No final payment had been announced by October 2026.