Initially we thought of a strange case of mismanagement: how was it possible that one of the largest crypto exchanges in Canada had not contemplated a contingency plan for these situations? The investigations, however, later revealed that Cotten had set up a modern Ponzi scheme. He showed clients false data on the performance of their investments, while he used clients’ money for personal expenses or investments. Those who wanted to cash out were paid with new capital raised. Overall, Cotten siphoned off about $200 million from users.
As can be read in the update by Ernst & Young, users will get a reimbursement check, but only part of the amount they lost: 13.094156% of their proven claim. QuadrigaCX faced around 17,648 claims, and one of them came from the Canada Revenue Agency (CRA). Quadriga would not have paid taxes of $11.7 million. Users will be reimbursed based on the cryptocurrencies held at filing for bankruptcy of the platform and based on their exchange rate in effect on April 15, 2019.
Many questions remain about these happenings of QuadrigaCX, which is certainly one of the most disturbing in the history of the crypto industry.
Disclaimer: I am not aware of any third party rights on the images used. I undertake to cite the source if there are any and to adjust the position if requested.
Disclaimer: Trading cryptocurrencies carries a high level of risk and may not be suitable for all investors. Before deciding to trade cryptocurrency you should carefully consider your investment objectives and your level of experience. Do Your Own Research. All opinions expressed here are owned by the respective writer and should never be considered as financial advice in any form.
ABOUT THE AUTHOR
EDITOR-IN-CHIEF AT NEW COIN POST. WE TALK ABOUT BITCOIN AND CRYPTO. JOIN OUR TELEGRAM CHANNEL TO BE UPDATED ON THE LATEST NEWS OF OUR INDUSTRY.