Their companies websites often shared registration information and were operated by the same computers. Canadian real estate developer Jennifer Robertson met Quadriga CEO Gerald Cotten on Tinder in 2014. In some exits, the operator simply vanishes with the funds. But looking at the information that I do know now, I do think he'd be the type of person who could orchestrate that.". "He also mentioned that the business would die without him," she said. Its object was not to track down every lost Bitcoin but to maximize the pot of money that could be returned to Quadrigas creditors. To remind, Gerald Cotten, died from complications of Crohn's disease while on a visit to India. They wanted answers. It begins with a few findings that do not fit neatly into the Royal Fuckup narrative. Four desks in a weird room, no business operations going on. Cotten rarely brought up his work, but details emerged. The plan, from the beginning, would be to keep the con going as long as possible before vanishing with the money. I love electric. The whole thing would cost $600,000, but expense never came uponly safety. If the Mastermind Theory seems far-fetched, its worth pointing out that an exit scam can only succeed if it seems far-fetched. Id like a boat that I can cruise locally, said the smiling boy, and then take south. He wanted to reach the Caribbean without having to stop in Canada or the United States. You couldnt hook up your bank account to anywhere. Two other properties, including Cotten and Robertson's home in Fall River, have been transferred to the Seaglass Trust, which lists Robertson as a trustee. Why did Robertson wait a month to notify investors of his death? Quadriga Fintech Solutions Corp. shut down in January following the death of founder and Chief Executive Officer Gerald Cotten, leaving some 115,000 customers out of pocket for about $260 million in cryptocurrencies and cash. Crypto Long & Short News and analysis for the professional investor. But users claimed they received deposits from Jennifer directly, seemingly contradicting her statement. Closed Captioning and Described Video is available for many CBC shows offered on CBC Gem. Inside the Dissident Fringe, Where the New Right Meets the Far Left, and Everyones Bracing for Apocalypse. And the fact that he did what he did I carry his shame with me. Patryn would tell friends that theyd first met in a con artist meet-cute, like the thieves in an Ernst Lubitsch film who fall in love while picking each others pockets. And Ill carry that shame with me, probably, every single day for the rest of my life.. He credited fake Quadriga accounts with fake funds but made actual trades by betting on cryptocurrency value. ', "And he was like, 'No, I'm the only one with banking connections, I'm the only one that knows how to work it.' (At press time those pizzas would be valued at $82,373,500.) He cleared trees and built a house, though he had no apparent plans to move in. There were limits, furthermore, to the scope of the monitors investigation. The following year it launched a bid to be listed on the Canadian stock exchange, submitting to a full financial audit. Other red flags raised by investors surrounding Cotten's death included his name being spelled incorrectly on the death certificate and his closed casket funeral. He was a founder and the CEO of Quadriga, Canadas dominant Bitcoin exchangesomething like TD Ameritrade for cryptocurrency. When search suggestions are available use up and down arrows to review and enter to select. Or Michael from Italy. Because Canadian banks refused to accept cryptocurrency businesses as clients, Quadriga had to rely on third-party processors, which levied outrageous fees and in some cases stole funds outright. We thought, finallyGerry is standing up to Mike. On May 24, 2013, federal agents in 17 countries arrested Liberty Reserves administrators, shuttering its website and seizing its records and bank accounts. Crypto Long & Short News and analysis for the professional investor. Under the Mastermind Theory, Cotten ran Quadriga much as he had S&S Investments and its successors, honoring enough withdrawal requests to maintain credibility. After learning of his death, one of his contractors immediately went to the house and searched for it. Mueller didnt understand how a federal convict had been able to change his name, continue to operate, and escape charges. It wasnt his first rodeo. (Patryn denies saying that he came from other countries: Im not nationalistic.). He had seemed to appear in Vancouver out of thin air. It was the cheapest exchange, the fastest, and, by all appearances, the safestthe first Bitcoin trading platform to hold a money-services business license from FinTRAC, Canadas anti-money-laundering authority. He befriended Cotten in 2016 in Toronto, where Cotten had moved during the effort to take Quadriga public. If you lose the private key to your cryptocurrency walleta long, randomly generated password, all but impossible to memorizeyour funds are gone forever. It took some time for him to grow on her, but they eventually fell in love. | Pikagi GROWING PAINS When S&S suspended operations three months later, taking most of its clients funds with it, Patryn took to TalkGold to defend Cottens integrity. He was accompanied by a girlfriend who drove her own Jeep. Bitcoin would enable more than two billion people who lacked access to banks to send and receive payment; it would offer stability to citizens of countries with chaotic currencies; it would eliminate all banking fees. But it was his past that, early on, became the focus of the Quadriga investigation. This would have been a startling about-face; in the early days, those who knew them believed that the company belonged to Patryn, with Cotten serving as a front man. More than 75,000 Quadriga account holders also had questions. In this way Cotten could have stowed away a fortune in foreign bank accounts in preparation for a grand exit. The cautionary tales of fortunes lost because of misplaced private keys have the quality, in Bitcoin mythology, of the homilies delivered at religious gatherings. Gerry stopped running the company legally and ethically from a filing standpoint after all of the employees, directors and officers left in January 2016, he wrote recently. Quadriga installed a Bitcoin ATM in its office, the second of its kind in Canada, and accepted gold by the ounce, which could be dropped off in person. Roberston said she's sorry for Cotten's actions and the harm he's caused. Amidturmoil in the cryptocurrency market, Cotten and Robertson got married and decided to travel to Jaipur, India, for their honeymoon. Box 500 Station A Toronto, ON Canada, M5W 1E6. In a small, inefficient market, Quadriga swiftly distinguished itself. She later explained it, saying, I hadnt understood how Quadriga had held money in the first place; I thought it was just a trade. Jennifer only knew that she was paid a commission to process payments for QuadrigaCX via a firm set up in her name. The media dragged Gerald Cotten's wife, Jennifer Robertson, into the spotlight after his mysterious death. In its registration documents, Midas Gold listed as its contact gerald.cotten@gmail.com. Gerry the Mastermind would count on the world believing he was reckless, greedy, and dead. The will made no mention of the external hard drives, called cold wallets, in which Cotten had stored most of Quadrigas funds. Within hours of the announcement of Cottens death, a crowdsourced, scrupulously documented investigation, applying the logic and methodology of the blockchain, was afoot. She believed in him. The smiling boy wanted a big boat. Their findings, though baroquely technical, could be distilled to a two-word conclusion: The initial portrait of Cotten that emerged in February 2018, once his death was announced through a Quadriga Facebook post, squared with the yacht salesmans impressions. Cotten's com." The Walrus on Instagram: "Jennifer Robertson met her husband, Bitcoin entrepreneur Gerald Cotten, on Tinder. He seemed like the kind of guy who might retire early to an island somewhere. Zou placed C$500,000 (305,000) in trust in Quadriga CX, Canada's largest cryptocurrency exchange. On his personal YouTube channel (account name Gerryrulz) he had posted several dozen homemade videos as infantile as they were portentous: Gerry incinerating a $20 bill in his microwave; Gerry knocking over a Jenga tower with a giant teddy bear; Gerry stuck in an amusement park maze, repeating the same mistakes, unable to escape. The most successful of these was Midas Gold, incorporated in early 2008. That led to speculation that Cottenmayhave faked his own death. After the public bid failed, he kept no internal recordsan almost inconceivable state of affairs for a company with an annual trading volume of more than $1 billion. He was always smiling, really friendly, offering stuff, says Alex Salkeld, a member of the original Vancouver Bitcoin circle. The Protocol Exploring the tech behind crypto. "I would have never, ever stolen from other people. After hearing that Patryn had been bragging all over Vancouver about his talent for laundering money, Mueller unearthed the connection to Dhanani. Cotten provided withdrawals manually, seeming to give preference to the customers who complained loudest in public forums. In isolation this might be written off as teenage hijinksor at most light fraud. He also created dozens of false trading accounts to stimulate trading volume on the platforma fact he even disclosed in the 2015 filings. The brutal murders of four Idaho college students shocked millions. He would have new names and passports, perhaps a new face. (TalkGold was run by twins Edward and Brian Krassenstein until 2016, when agents from the Office of Homeland Security seized their files and froze their assets but never charged them with a crime. A yacht salesman never asked what customers were looking to spend, or whether they had ever been on a yacht, let alone knew how to operate one. Its just completely out of their wheelhouse, says a Quadriga creditor and cryptocurrency expert who was interviewed after publishing his findings online under the moniker QCXINT. According to Quadrigas last public filings in 2015, it operated in a deficit. More than 75,000 Quadriga account holders also had questions. After he squandered what remained in Quadrigas coffers, the price of Bitcoin plunged, and there was a run on the exchange. He sent cash, in paper bags and shoeboxes, to coffee shops, laundromats, and pool halls. Cotten was a computer nerd who had entered the right business at the right time and succeeded beyond his wildest dreams. Cotten, 26 at the time, said he worked in bitcoin. Jack Julian joined CBC Nova Scotia as an arts reporter in 1997. Robertson maintains she knew little about the company's inner workings, and largely did as she was told. The Seaglass Trustbecame the mortgage holder on all properties owned by Robertson Nova Property Management on Jan. 25. It was just such a challenge.. You don'thave like Aaron Matthews [Quadriga's director of operations] or anybody that would be able tokeep the company on? Nine days later Cotten is believed to have died due to complications of Crohn's disease, with Robertson announcing the death publicly a month later. The delay tactic is more successful than might be expected, since customers of HYIPs understand, on some fundamental level, that promises of outsized returns are too good to be true; besides, there was always another outrageous bargain a few clicks away. Im going to build a Bitcoin exchange. It was then revealed that Gerry presumably happened to be the only person with access to the digital keys to the cold wallets that held the cryptocurrency. Additional investigations were begun by the Royal Canadian Mounted Police; the FBI; and at least two other law enforcement agencies that have not been publicly disclosed (though one of them is likely a federal agency in Japan). Quadriga mystery deepens with little evidence of cold wallets containing $250M, QuadrigaCX founder used aliases, moved assets into personal accounts: report, Lawyers for QuadrigaCX clients seek exhumation of late founder's remains, Curious about cryptocurrency? It was the largest online money-laundering case in American history: Liberty Reserves 5.5 million user accounts had conducted 78 million transactions worth more than $8 billion. Confusion compounded confusion. Gerry was a very careful person who well understood the need to back up ones private keys. Most conspicuous was the odd way that the young man always seemed to be smiling. Carlson was identified on the deedas general manager ofIsland Limited Partnership,registered in Maine. Apart from that, Jennifer is studying to become an elementary school teacher and hopes to graduate soon. She decided that his involvement might mean that Quadriga was legitimate after all. But he never did. In 2018 she helped lead a team of reporters and editors to win the RTDNA Ron Laidlaw Continuing Coverage Award for work on the Deep Trouble series. 2023 Cinemaholic Inc. All rights reserved. His clients were locked out of about $250 million, and investigators later found widespread fraud. Barely more than 24 hours after the onset of a stomachache, he was pronounced dead. However, the couple never arrived at the house, and the honeymoon did not go as planned. He was driven to a private hospital and diagnosed with acute gastroenteritis. Crypto for Advisors What financial. We didnt want to cast doubt on our own scene. Because Canadian banks wanted nothing to do with Bitcoin, users had to transfer funds through a series of intermediaries, bleeding transaction fees. In Ernst & Youngs phraseone imagines its battalion of stern accountants in various shades of apoplexytypical segregation of duties and basic internal controls did not appear to exist. Most years Cotten neglected to file a personal tax return. By that point, however, a new Gerald Cotten venture was already six months old. Law enforcement has the edge in nearly every other category: crime labs, informants, surveillance technology, forensic databases, the threat of arrest. He might still be collaborating with Patryn, or Patryn might be trying to track him down in a final act of Con vs. Con. Among those Mueller warned was Amber Scott, an anti-money-laundering expert at a compliance firm in Toronto called Outlier Solutions. (For months, Miller Thomson, the Bay Street law firm appointed to represent the class of creditors, received hundreds of emails a day inquiring about the lost funds, and answered such a constant barrage of phone callsheartbreakers about lost pensions and college savings, babies crying in the backgroundthat its lawyers could do little else.) But in February 2018, his. More than three years after the sudden death of Quadriga CEO Gerald Cotten and the revelations that the company was a massive cryptocurrency scam, his widow, Jennifer Robertson, tells her side of the story. "I did let that go to the lawyers and the contractors, and I trusted that they knew what to do," she said. (Patryn, Jennifer Robertson, and at least a couple of other Quadriga contractors each operated their own payment processing firmsa significant conflict of interest, though not illegal.) Within months, things went from bad to worse for everyone involved. Gerald Cottenwas just 30whenhedied in India in December 2018. Much of Quadrigas riseand Bitcoinshad been fueled by speculation from greenhorns who had heard something exciting about cryptocurrency from their nephew or cable news. While Jennifer said she stopped processing payments in 2016, customer receipts showed the firm continued paying customers in 2017. In October 2013, Cotten placed a job posting on an online forum, BlackHatWorld, that marketed frauds and stolen goods. According to an investigation by Canada's Globe and Mail, Cotten. The Protocol Exploring the tech behind crypto. "Some people think Gerald is still alive,somewherehe'sat the beach, sipping a Mai Tai;he's benefiting from all of the millions that were stolen from investors. Both men soon graduated, however. They wanted revenge. Not least due to the fact that allegedly only Cotten knew the passwords to the cold wallets worth nearly $ 190 million. After Cotten's death, she agreed to forfeit $12 million in assets that included vehicles and real estate. See tweets of EXIT SCAM @exitscampod on Twitter. OFFICE SPACE Looking for more? "I saw Gerry die, I was holding his hand when he passed away. On one particular margin account, he conducted 67,000 individual trades alone, placing enormous bets on fledgling currencies like Dogecoin, OmiseGO, and Zcash. Using Cotten's money, Robertsonstarted her own real estate company andmanagedmore than a dozen properties. Its clients tended to be surgeons and litigators and C-suiters who travel from Toronto and Paris and Hawaii to summer in Nova Scotia; their wives wear silks and Manolos and perfect fingernails that cost $300 yesterday at the salon. Less than three months later, the Quadriga Fund was dead, and Quadriga CX went live. Cotten amassed millions from setting up what was once Canada's biggest cryptocurrency exchange, QuadrigaCX, and lived a lavish lifestyle After his mysterious death during his honeymoon with wife. So, if youre curious to find out more, weve got you covered. Over several dozen hours of sailing lessons, the yacht dealer learned a few things about his customer. He used to say he didnt open up to many people, but he was able to open up to me.. All of it looked bad, but there was no confession of criminality. Cotten passed away from complications that arose from Crohn's disease while on a honeymoon in Indiaapparently taking some $215 million of customer funds to the grave. It looked hollow. Weinberg and several others who visited the office for Bitcoin meetups saw stacks of hundreds of payroll checks in the names of businesses that were not Quadriga, addressed to people who were not Quadriga employees. In February 2019, Jennifer insisted she was not privy to the companys business, asserting that Gerry was solely responsible for its dealings. Patryn told reporters after Cottens death that they had met online over five years ago, but this was about as accurate as calling himself an adviser to Quadriga when in fact he had been the cofounder. Despite additional travailsa software glitch that lost C$14 million, a cease-trade order from the British Columbia Securities Commission after Cotten failed to file an audit, and CIBCs seizure of C$21 million from one of its payment processors after the bank failed to determine its rightful ownerQuadriga profited wildly from Bitcoins giddy rise. He was careful and pragmatic. Another co-op member, Michael Yeung, rejecting the insinuation that Cotten had been out to make a quick buck, said he was in it for the long haul., In February the Canadian Broadcast Company interviewed Michael Patryn. Exit Scam: The Death and Afterlife of Gerald Cotten. The following afternoon Robertson returned with the body to Canada. I spent a couple of hours on the phone explaining the basics to an RCMP investigator and came away feeling like hed be much more comfortable with a dead body, a loaded gun, and a trail of blood.. The following afternoon his condition deteriorated and blood tests indicated septic shock. Far more likely is the narrative of Gerry the Royal Fuckup. There were further questions regarding Jennifer changing her name from Griffith to Forgeron and then to Robertson. Be a smarter, safer investor in eight weeks. His wife, Jennifer Robertson, said he promised to create a mechanism that would give her the passwords after his death. Closed Captioning and Described Video is available for many CBC shows offered on CBC Gem. Use of this site constitutes acceptance of our User Agreement and Privacy Policy and Cookie Statement and Your California Privacy Rights. He loved to fly: planes, helicopters, drones. That would require an extra fuel tank, the salesman explained, and a desalination system for drinking water. I dont get to hold myself blameless. Once, Cotten mentioned that his business partner was visiting Toronto and asked her to coffee. There was also the C$21 million seized by CIBC and the software glitch, which cost Quadriga C$14 million overnight. She is trying to put her life back together and is working as a waitress part-time. Bitcoin was founded on the principle that no individual or institution should be trusted. 2023 Cond Nast. That was our perception, at least., (Patryn has argued the reverse: that he quit Quadriga because he disagreed with Cottens decision to abandon the public listing. It was a gentle, unflappable smile. Jennifer Robertson told CBC's The National she knew nothing of the widespread fraud her husband had committed.