Perhaps unsurprisingly to anyone following the case, according to the latest report by Ernst & Young auditors, Gerald Cotten, the ‘deceased’ Quadriga CX CEO, had created a number of fake accounts on his Canadian cryptocurrency exchange, containing non-existent balances, and then used those accounts to buy his customers’ cryptocurrency.
He then moved the ‘purchased’ Bitcoin and Ethereum into his own accounts at other genuine cryptocurrency trading sites.
This report to the Supreme Court of Nova Scotia, from Ernst & Young, continues to document the ongoing investigation into Quadriga, following the unexpected death its CEO.
According to his widow, Jennifer Robertson, Cotten, aged 30, died, of complications from Crohn’s disease in a hospital in Jaipur, India, last year.
Quadriga’s customers were then left unable to access their funds as Cotten passed away having sole access to the private keys that opened the digital wallets containing customer funds.
During their investigation, Ernst & Young were able to access five of Quadriga’s six offline cryptocurrency wallets, in an attempt to recover customers’ coins, and, as reported on the website The Register, “all five had been cleaned out by April 2018. The sixth was emptied on December 3, 2018, six days before Cotten was said to have died during his travels in India”.
According to Ernst & Young, there’s no evidence Quadriga maintained any accounting records since 2016, and that Cotten appears to have treated his customers’ assets as his personal slush fund.