'The Crypto King': What Happened to QuadrigaCX and Is It Still Operating?

Trust No One: The Hunt For The Crypto King is Netflix's latest true-crime documentary. The film charts the rise and fall of Gerald "Gerry" Cotten, the co-founder of cryptocurrency exchange, QuadrigaCX.

In December 2018, Cotten died whilst on honeymoon in India, taking CA$250 million ($200 million) with him and the passwords to Quadriga accounts where Quadriga funds were stored in "Cold Wallets." According to the Netflix documentary, Trust No One, at least 110,000 Quadriga users were affected.

Three years later, audiences are wondering what actually happened to QuadrigaCX and if it is still operating today. Newsweek has everything you need to know about what happened next in the wake of Cotten's unfortunate death.

What Happened to QuadrigaCX and Is It Still Operating?

QuadrigaCX Today

No, QuadrigaCX is not still operating today.

Once Canada's largest cryptocurrency exchange, co-founded by Cotten in 2013, QuadrigaCX ceased operations in late January 2019.

The company then filed for bankruptcy in April 2019, with CA$215 million ($172 million) in liabilities and about CA$28 million ($22 million) in assets, reported by The Ottawa Citizen.

What Happened to QuadrigaCX?

The company's demise was triggered by the 2018 bitcoin crash and exacerbated by the death of its co-founder, Cotten in December 2018, who was in control of everything the business entailed.

Throughout 2018, QuadrigaCX had been having "liquidity problems" after one of its payments processors, holding $25.7 million, had been frozen by the Canadian bank CIBC, in a dispute over the real owner of the funds, according to The Ottawa Citizen.

As heard in Netflix's Trust No One, in the months leading up to Cotten's death, users had been complaining about how they could not access their money and were waiting weeks to receive their funds.

Cotten, who died on December 9, 2018, from complications of Crohn's disease, took with him to the grave up to CA$250 million ($200 million) in cryptocurrency as well as the passwords to the funds which were held offline in cold wallets.

Cotten's entire C$9.6 million ($7.6 million) estate was left to his wife, Jennifer Robertson and in January 2019, Quadriga officially confirmed Cotten's passing.

The company was then put into maintenance mode and at the end of January, Quadriga announced it was applying for creditor protection.

Robertson expected a "Dead Man's Switch" (an email or message triggered by an unexpected death providing passwords to accounts) to be activated shortly after Cotten's death, as he had allegedly promised he would set up, but this never materialized.

Robertson has always maintained she never had access to Cotten's laptop, passwords or Quadriga accounts. In her affidavit, she wrote she could not find any sort of information relating to Quadriga's accounts, "despite repeated and diligent searches."

In the wake of Cotten's death, Robertson inherited millions of dollars in real estate holding, but in October 2019 she returned CA$12 million ($9 million) worth of assets to Quadriga from her husband's estate as part of a voluntary settlement, reported Bloomberg News.

As part of Quadriga's temporary legal protection under the Companies Creditors Arrangement Act, Ernst & Young, an independent monitor, found Quadriga did not have an official bank account and instead processed its payments through third parties and was run from Cotten's laptop from his home in Fall River, Nova Scotia, according to The New York Times.

Ernst & Young was able to track down several cold wallets which were thought to be holding over C$230 million ($184 million) worth of cryptocurrency in early March 2019, but all of them were empty. It also found that Quadriga had "inadvertently" transferred Bitcoins valued at half-a-million dollars into more cold wallets, which they were unable to access, reported the BBC.

Simultaneously, an investigation was launched by The Ontario Securities Commission (OSC). Ernst & Young found Cotten had transferred millions of dollars in crypto out of customer accounts and into other bitcoin exchanges, using different names.

Further, the OSC found Cotten lost approximately CA$143 million ($115 million) using these aliases, he also lost CA$34 million ($28 million) on external exchanges and spent approximately CA$29 million ($24 million) on property, vehicles, vacations, and other personal expenses.

The OSC concluded Cotten was effectively running a Ponzi scheme.

The report stated: "What happened at Quadriga was an old-fashioned fraud wrapped in modern technology. Quadriga did not consider its business to involve securities trading and it did not register with any securities regulator. This lack of registration facilitated Cotten's ability to commit a large-scale fraud without detection. So did the absence of internal oversight over Cotten."

Since Cotten's death, there have been numerous conspiracies that it was all part of an orchestrated "exit scam" and he is still alive today.

As heard in Trust No One, some people believe he faked his death or has changed his name and appearance to remain undetected. Others thought he may have been killed or had taken his own life.

At one point, there were calls for Cotten's grave to be exhumed for an autopsy to be performed on the body "to confirm both its identity and the cause of death."

All theories are unproven and Cotten is believed to have died in December 2018.

Trust No One: The Hunt for the Crypto King is streaming on Netflix now.

the hunt for the crypto king
"Trust No One: The Hunt For The Crypto King" is streaming on Netflix now. Netflix