Netflix's latest true crime documentary focuses on Quadriga Fintech founder and CEO Gerry Cotten and the unusual situation surrounding his mysterious and untimely death. “The Hunt For The Crypto King” leads with a theory that the CEO managed to fake his death after holding around $250 million in trader’s money, which was then lost once he died due to only him having the passwords to access the trading and investment accounts.
With cryptocurrency only increasing in popularity and scams becoming more and more commonplace, let’s take a look at the mysteries surrounding The Hunt For The Crypto King and what lessons you can learn from the new crime documentary.
Who Was Gerry Cotten?
Gerry Cotten was a Bitcoin investor from Canada who founded Quadriga CX - the cryptocurrency trading platform - in 2013. In just a few short years, the platform became the biggest of its kind in Canada. In 2016, just a year before Cryptocurrency launched into the mainstream, Gerry took over as sole director. This then resulted in a huge increase in investor interest, some sources say around $1billion went through the company in 2017, but Quadriga soon ran into financial difficulties.
What Happened To The Crypto King?
As explored in The Hunt For The Crypto King, in 2018 interest in Bitcoin dropped massively. This then led to a number of Quadriga CX customers rushing to withdraw their funds and get their money back. Some investors who held Bitcoin with other investors also transferred their Cryptocurrency to Quadriga CX as, at the time, they could make some money by doing so. But, those who requested their funds back never received it.
At the same time, Gerry Cotten got married and, whilst on his honeymoon in India, he passed away at the age of 30 from complications of Crohn’s Disease. This sudden news came as a huge shock in the industry, but it also left a lot of questions unanswered, especially for investors who were still waiting on their investment funds to be returned.
Why Was His Death Surrounded By Controversy?
When ‘The Crypto King’ died, he was the only person who held the ‘keys’ to Quadriga CX’s wallet, as he had never shared the passwords with anyone else. At the time, there was around $250million in Cryptocurrency that was owned by around 115,000 customers, which was basically unretrievable.
Shortly after the announcement of Gerry’s death, the Quadriga website went offline for ‘maintenance’ and then, soon after, the company was declared bankrupt, meaning that customers had no way of getting their money back. In The Hunt For The Crypto King documentary, some investors stated that they believe Gerry Cotten is still alive and staged his death as a way to defraud customers and get out of repaying them their money.
There are also some suspicious details that investors were unsure of following his death. In the days before his death, Cotten changed his will and instructed that everything be left to his wife, including a $9.6million estate and a $100,000 trust fund to look after his dogs. Upon his death, his death certificate was found to be misspelt and signed off by police in India with no objection and his body was quickly returned to Canada.
His death wasn’t announced for around a month, but investors later found out on the company website, rather than directly or with any information on what this meant for their funds. The company soon declared bankruptcy, with around $215.7million in liabilities and $28million in assets.
How Did This Affect Investors?
Shortly after Quadrigo announced bankruptcy, investors who were owed money began investigating the suspicious circumstances. It soon emerged that Cotten and his previous business partner Patryn had a series of connections to Ponzi schemes, also known as pyramid schemes. During this scheme, it was found that ‘The Crypto King’ Gerry Cotten would transfer millions from other investors’ accounts as a way of affording his luxury lifestyle. The accounting firm Ernst and Young discovered this in 2019 when investigating on behalf of concerned investors.
Shortly after, the Ontario Securities Commission determined that Quadrigo was a scam pyramid scheme and in their report, said that “whether they were aware of it or not, Quadrigo’s clients were exposed to risks beyond fluctuations in crypto asset prices when they chose to trade on the platform”.
It was found that Cotten took advantage of investors and treated their assets as personal funds which he would spend, use and trade at his own will. He eventually depleted those assets to such an extent that this then took down the company. Although there is no evidence that Cotten is still alive, it is widely believed that he faked his own death to get out of returning funds.
How To Spot Signs Of Cryptocurrency Scams
Whilst there are a number of legitimate Cryptocurrency trading platforms, there are unfortunately a growing amount of crypto scams similar to that of The Crypto King that are causing investors to lose money. Fortunately, it is becoming increasingly more clear to spot signs of cryptocurrency scams, which can include:
- Being advised how to trade
- Assured a guaranteed profit or return on investment
- Being put under pressure to make a deposit
- Being asked to pay a fee or invest more money
If you recognise any of these signs, then you may have been the victim of a Cryptocurrency scam. Please contact us today for a free consultation where we can look into ways to recover your trading losses.