104 Bitcoins Moved: The case of the late Quadriga CEO is revived

Five bitcoin accounts related to the bankrupt crypto exchange QuadrigaCX were emptied on December 17. In total, just over 104 bitcoins worth $1.76 million were withdrawn. 69 bitcoins were sent to a service (Wasabi Wallet) that specializes in obfuscating bitcoin transactions. The trace of these coins will therefore be lost.

What looks like dozens of transfers are in fact highly explosive – and will spark much debate and wild speculation in the coming days and weeks. The big question is, who had access to the five bitcoin accounts?

Crypto exchange QuadrigaCX (QCX) went bankrupt in 2019. This was after the CEO and founder Gerald Cotten died on December 9, 2018 in Jaipur hospital in India due to Crohn’s disease under dubious circumstances. Cotten’s wife, Jennifer Robertson, said her husband was the only one who knew the access keys to the Quadriga accounts. His death meant the total loss of all systems for all 115,000 Quadriga customers. The damage amounted to 250 million Canadian dollars – 190,000 US dollars.

Robertson’s statements and even her husband’s death were immediately questioned by Quadriga clients. Cotten’s name was misspelled (Cottan) on the death certificate and someone continued to use Cotten’s Skype profile after his death. A team of journalists from the Canadian daily “The Globe and Mail” began an investigation, as did a self-help group made up of victims. What came to light was adapted by Netflix into the documentary “Trust No One: The Hunt for the Crypto King” – and there were many:

It became known that the nerdy and charming Gerald Cotten had lived a double life for many years. Under the pseudonym “Scepter”, he was responsible for several internet fraud cases. For example, he founded the investment company S&S, which suddenly disappeared after raising funds.

Quadriga co-founder Michael Patryn was also caught. Years ago, Patryn operated a money laundering ring in California under his birth name Omar Dhanani, where he served a prison sentence for dealing in stolen identities and credit cards before being deported to Canada. There he changed his name, first to Omar Patryn, then to Michael Patryn.

Finally, connections between Quadriga and his wife Robertson’s real estate business have also been revealed. She had always maintained that she was in no way connected to Quadriga.

Because no one in Canada except the widow had ever seen Gerald Cotten’s body, Canadian journalist Nathan Vanderklippe traveled to India. There he met the doctor who could describe Cotten’s last hours. There was at least less doubt about Cotten’s death, but the circumstances remained dubious. Just two weeks before his surprise death, the 30-year-old had written a will that he wanted to inherit all of his possessions, including several houses, a boat and a plane, in the event of his wife’s death. The fact that Robertson waited more than a month to report her husband’s death was also interpreted as suspicious, as was the fact that she did not request an autopsy. She became a target for many Quadriga victims and had to go into hiding after receiving several death threats.

The Canadian authorities and a team of blockchain analysts had also become active. They eventually discovered where the client’s money flowed to the value of 200 million. Cotten had systematically speculated on other crypto exchanges – the parallels with the current case of the crypto exchange FTX are striking. Cotten, though smart, was a spectacularly bad trader. Quadriga’s CEO lost an estimated $150 million.

And as if there wasn’t enough Tinder in the story already, Ernst & Young reported in a February 2019 initial report that on February 6, 2019, two months after Cotten’s death, 103 bitcoins were “accidentally” moved to an account on that account. only Cotten have access. The report gave no further details, such as who initiated the transaction.

Current activity on the accounts is now raising questions again, reviving long-buried conspiracy theories. Since early 2018 and Cotten’s death, no one had transferred bitcoins from the five accounts. Now they are empty. Patryn, his wife Robertson, the “dead” Cotten and employees of Ernst & Young are suspected.

Michael Patryn continued to wreak havoc in the crypto, DeFi, and NFT scene until early 2022 under the pseudonym “Saifu” or “0xSaifu”. After being exposed by arguably the best blockchain detective @Zachxbt he was voted off as head of the DeFi project Wonderland. Soon after, he sent 2,000 coins of the cryptocurrency ether ($2.4 million) to Tornado Cash. Like Wasabi, the service, which is illegal in the US, specializes in transaction concealment.

Meanwhile, Jennifer Robertson gave up houses, cars and other valuables. She was left with $110,000 Canadian, a 2015 Jeep Cherokee, $15,000 worth of furniture, and a modest amount of jewelry. She continues to protest her innocence. She didn’t know about the whole scam.