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Quadriga Crypto Mystery Deepens With ‘Cold Wallets’ Found Empty
- glitchc 8y agoI’m willing to wager a decent sum of money that Gerald Cotten is not actually dead, but has rather absconded with all of Quadriga’s holdings, and is currently in hiding waiting for the buzz to die down.
- tyingq 8y agoIt's actually not a bad plan. I was sure someone would murder Karpeles, or that he would be rotting in jail forever. Neither happened, and most regular folks have no idea who he is. I believe 10 years is the worst he's potentially facing.
- Phlarp 8y agoHis personal bitcoin holdings have appreciated substantially in the time since Mt. Gox imploded too.
- solotronics 8y agoI suspect Carpeles made a deal with a group in Japan who are keeping him safe for some exorbitant sum of money.
- krapp 8y agoThey made him an offer he couldn't refuse?
- HarryHirsch 8y agoThus both sides benefit from the trade.
- Lordarminius 8y agoSame here. Most suspicious element of the whole case was the claim that he died from Crohn's disease (a condition that has a 3% mortality rate) and the lack of a body. WHERE IS THE BODY? I call b.s. Cotten is alive
- robbiep 8y agoUsing ‘a 3% mortality rate’ is not a very accurate way of conveying the burden of disease of a chronic condition such as crohns. People can be fine for ages, have stable disease, then experience a flare up, and if they have a perforation and ignore the symptoms, or are unable to access top line medical care (both likely in this situation) then death within 1-2 days is 100% possible.
- tyingq 8y agoI guess you could think maybe he went to India for some off the books risky surgery for his Crohn's and died on the table. Not sure if that's less believable than the theory he's still alive though.
- Laforet 8y agoHe supposedly died in a region rife with fake death schemes. https://www.newsbtc.com/2019/02/06/ceo-who-held-150m-in-crypto-died-in-a-region-known-for-having-a-fake-death-mafia/ https://www.newsbtc.com/2019/02/06/ceo-who-held-150m-in-cryp...
- robocat 8y ago> 3% mortality rate Actually no one knows the lifetime and annual mortality rates very well: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1856159/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1856159/
- jpatokal 8y agoCrohn's plus acute gastroenteritis (food poisoning). Delhi Belly is ubiquitous in India and can get pretty gnarly: my wife got dysentery on her first visit, and I'm not sure what would have happened without prompt diagnosis and antibiotics.
- matthewwiese 8y agoThis theory, although fantastical, appears to fall in line with what little is known about Cotten. The kind of person to run a quarter-billion dollar operation solely from their laptop, I would think is certainly liable to pull a stunt like this. What's more interesting, however, is that the converse situation is equally likely: that the supposed ignorance of Cotten played up in the reporting of this story by the media plays absolutely in his favor. Would you trade appearing a fool to "get away with" something like this? If I were to have unrestricted access to $250M and woke up on the wrong side of the bed one day (or just a bad day in traffic, even) it would take little to flip a switch in my head and think, to Hell with all this, let's skedaddle! However, I am way too much of a paranoiac to do this without absolutely ruining my QOL after the fact, hah. I suppose situations like this is why we have the Two-man Rule for nuclear launches, &c. Keep those delusions in check!
- jacobush 8y ago”Two-man Rule for nuclear launches”. You would think, right?
- Mvandenbergh 8y agoThe two-man rule only applies to the launch officers, not to the launch authority (president or his successor).
- hi5eyes 8y ago“boating accident”
- Deimorz 8y agoI also think he's probably not dead, but I don't think he absconded with the holdings. I think it's a slightly different situation: there aren't any significant holdings left, and haven't been for a while. I think he already spent/lost almost everything they had, expecting that crypto would go up and everything would work out. Then it went down and stayed down, his plans blew up, and he knew he was screwed and could never pay the users back. That is, I don't think it's an exit scam, I think it's a desperate attempt to hide a massive failure in running the exchange. The "we can't access the cold wallets any more" was intended to be a believable excuse that would explain why they couldn't return people's money.
- pjc50 8y agoThe eternal bitcoin question: malice or incompetence?
- sxafo 8y agoProbably a some mixture of both. Or at least reckless disregard.
- newsbinator 8y agoNever attribute to bitcoin that which is adequately explained by stupidity.
- spookthesunset 8y agoConsidering the whole ecosystem is a rich tapestry of scammers scamming scammers.... the answer to your question is "yes".
- msh 8y agoWell && is also possible instead of ||
- pjc50 8y agoAh, of course - what if he stole the cryptocurrency then accidentally died while being the sole holder of the passwords? Oh well, unrecoverability is a feature, as people keep reminding us.
- tim333 8y agoThe Globe and Mail flew reporters out to India to chat to the doctors and hospital and it seems he did die - https://outline.com/MS67gd https://outline.com/MS67gd In further goings on it seems: >The co-founder of troubled cryptocurrency exchange QuadrigaCX is a convicted felon who served time in the United States for his role in an online identity-theft ring 'Michael Patryn', who changed his name and had a nose job https://outline.com/TdWDgM https://outline.com/TdWDgM My guess is Cotten died and the latter is trying to keep the money
- glitchc 8y agoI read this article. It’s certainly possible. Did Michael/Omar travel to India with Cotten on the trip that Cotten died?
- virtualwhys 8y ago> Did Michael/Omar travel to India with Cotten on the trip that Cotten died? Given that Cotton and his wife were in India largely for their honeymoon (and secondarily to celebrate the opening of the orphange they in part funded), it's highly unlikely that his former business associate would have traveled to India with them. If you read the 2nd linked article Patryn claims that he left the company around 2016 after a falling out.
- 8bitsrule 8y agoI smelled an odor when I first read about the 'orphanage'. Awww, how nice. Today I read the gift's details, and the odor's stronger. "Mr. Cotten’s money, however, did not buy an orphanage. It bought materials, but Mr. Cherukupalli had to arrange the construction himself. And the materials were insufficient – there was enough for walls and furnishings, but not enough.... Mr. Cherukupalli began to accumulate more debt as he secured labour and additional materials."
- 52-6F-62 8y agoWhoa I didn’t catch this. Thanks for posting it.
- elorant 8y agoSo how do you cash $250M in crypto?
- deleted 8y ago[deleted]
- tluyben2 8y agoVery, very slowly.
- JumpCrisscross 8y ago> Quadriga was primarily run by Cotten, using his laptop A quarter of a billion dollars...
- deleted 8y ago[deleted]
- krapp 8y agoSurely you're not implying that there should be some sort of ... regulation or authority governing financial transactions at that scale?
- TheOtherHobbes 8y agoEspecially not for crypto. Given crypto's history, I have no idea why anyone would even consider such a thing.
- bryananderson 8y agoCryptocurrency’s most realistic use case: rapidly educating libertarians on why financial regulation exists.
- gotocake 8y agoIn theory yes, but in practice you just get a demonstration of Festinger’s observations of cogntiive dissonance. When the the flood doesn’t arrive at midnight, you’d expect people to walk out, but most just decide they for the timing wrong and wait for the next one. https://www.simplypsychology.org/cognitive-dissonance.html https://www.simplypsychology.org/cognitive-dissonance.html
- 32032141 8y agoA notable reason for this sort of thing happening is that the price increased. Solutions which are obviously just toys very quickly grow into problems without you having to do anything.
- m3kw9 8y agoYou wonder won crypto hasn’t caught o
- deleted 8y ago[deleted]
- UncleEntity 8y agoSomeone claims to have found a bunch of their ETH stored at other exchanges -> https://blog.zerononcense.com/2019/02/28/quadrigacx-ethereum-storage-found/ https://blog.zerononcense.com/2019/02/28/quadrigacx-ethereum...
- pjc50 8y agoSo, has anyone attempted to crowdsource-track where the money actually went? All bitcoin transactions are public, after all; getting a large enough number of people to say "I received transaction X from/to Quadriga" should highlight where the central wallet was? Alternatively, do we know what happened to the real money bank accounts of Quadriga?
- mayamatrix 8y agoYes there are several such projects underway: 1) https://www.reddit.com/r/BitcoinCA/comments/avzh7s/community_call_to_action_submit_your_verified?sort=confidence https://www.reddit.com/r/BitcoinCA/comments/avzh7s/community... 2) https://www.reddit.com/r/BitcoinCA/comments/ar86lf/report_shows_quadrigacx_cold_wallets_actively?sort=confidence https://www.reddit.com/r/BitcoinCA/comments/ar86lf/report_sh...
- tim333 8y agoIf you fancy a challenge: >Crypto exchange Kraken is offering up to $100,000 to anyone who can help solve this year’s biggest blockchain mystery: what happened to QuadrigaCX’s coins? (https://www.coindesk.com/kraken-exchange-offers-100k-reward-for-missing-quadrigacx-crypto https://www.coindesk.com/kraken-exchange-offers-100k-reward-...)
- Myrth 8y agolol at people who give strangers money for a promise to return
- dmitriid 8y agoSomething, something, trustless transparent system where everything is known and you can always track every transaction unlike something something government banks authority unintelligible
- v64 8y agoThe coins themselves can be tracked on the blockchain, but once they're deposited on an exchange, the coins join a general pool and accounting external to the blockchain (such as what account on the exchange was credited for a coin's deposit, whether or not the coins were sold, and what amount of cash was withdrawn) becomes relevant.
- roywiggins 8y agoHowever, it's totally possible for an exchange to periodically prove, or at least persuasively demonstrate, how much money they have, by proving they have the private keys for wallets worth a certain amount. Proving they don't have more obligations is harder, obviously, but you can prove you haven't lost all your deposits if you want.
- v64 8y agoFor those interested, here's an example of such a Proof of Liabilities implementation [1] with previous HN discussion [2]. [1] https://github.com/olalonde/proof-of-liabilities https://github.com/olalonde/proof-of-liabilities [2] https://news.ycombinator.com/item?id=7277865 https://news.ycombinator.com/item?id=7277865
- jMyles 8y agoIf you have a critique to make, then make it. These kinds of comments all over every blockchain-related posts aren't really advancing any discussion. Let me start: why do you want blockchain tech to go away? And if it goes away, do you have a different suggestion for people who find central banking to be unjust?
- 8y ago
- oblib 8y agoFor a tech touted to be a complete and indisputable record of financial transactions it sure seems like a lot of cash has disappeared within it. I don't claim to know anything about blockchain tech but I have been exposed to the hype around it and the mystery for me is why anyone wouldn't have cashed out long ago.
- toyg 8y agoI just “cashed out” the joke £50 i “invested” in Btc a couple of years ago. They are now worth £18. I expect the real sharks have cashed out a long time ago.
- WrtCdEvrydy 8y agoI cashed out around $1000 USD for about $6000 3 months ago... crypto's just chilling recently, we'll see if there's another price kickoff.
- thinkmassive 8y agoIf you held it for a "couple" years then you should still be ahead, definitely not a >60% loss: https://bitcoincharts.com/charts/krakenUSD#rg730ztgSza1gSMAzm1g10zm2g25zl https://bitcoincharts.com/charts/krakenUSD#rg730ztgSza1gSMAz...
- usrusr 8y agoMaybe dog years, or some unusual form of £ that has appreciated a lot relative to popular currencies (conventional and crypto) in the meantime? Or 60£ in an active investment between cryptos, occasionally taking on a little loss+fees? I was originally planning to end this post with "or just making up some numbers", but since GP was writing of a joke investment, active gambling seems to be a reasonable assumption. And putting in 50£ in a toy account (and never extending it with fresh money), leaving with 18 after years, that also doesn't seem like an unreasonable thing to do. That's lower stakes than meeting for an amicable 2£ per player poker night once a month. If the stated goal of a joke investment is a dividend in entertainment, then passive is a terrible investment strategy.
- goodroot 8y agoI am probably alone in this, but... Yes, I lost $15,000 — but if you’re going to lose money on a budgeted, high risk investment, it’s great to do so embroiled in the strangest of human/technical dramas. I am loving it.
- Theodores 8y agoI hope you have money for the popcorn. Most people in the USA and the world do not have $15000 so you ain't no worse off in the bigger scheme of things.
- twic 8y agoI reckon there are ways you could get a lot more embroiled than that for fifteen large.
- Sytten 8y agoSame for me. Lost less than you, but I was almost laughing when I heard the news. Maybe we should crowdsource a movie to regain the money lost. That's quite a plot we have here.
- WrtCdEvrydy 8y agoQuadriga Crypto: The Exchange That Never Happened.
- WrtCdEvrydy 8y agoJust take the IRS writeoff for your $25,000. The IRS will accept it since the company is bankrupt.
- protomyth 8y agoYou really need to talk to a professional about documenting your $35,000 loss. The IRS gets very nasty about stuff the looks out of line with their expectations.
- 8y ago
- woogiewonka 8y agoFor a loss of this scale, you'd think the authorities would start looking into Cotten's communication prior to all of this. I would imagine the things he spoke about with others would provide some clues.
- spookthesunset 8y ago> you'd think the authorities would start looking into Cotten's communication prior to all of this. The irony is many of the people into bitcoin are the kind of people who think tax is theft and the government should get out of everything in their life. ... right up until they suffer a personal financial loss. Then it is up to the government to make them whole....
- retsibsi 8y ago> ... right up until they suffer a personal financial loss. Then it is up to the government to make them whole.... I'm very much not a libertarian (or anarchist, or anything in that vicinity) but this is unfair. We all have to work within the existing structures of power; we can't just pretend that things are currently working the way they would in our utopia.
- NelsonMinar 8y agoGosh what a big mystery! Shady financial business closes with the death of the founder under mysterious circumstances and all the money is missing. I wonder what ever could have happened?
- virtualwhys 8y agoRegarding Cotton faking his own death, see first link in this HN comment [1] Seems highly improbable that his death was staged, there would have had to have been several separate organizations all in on it -- if the reporting is accurate, he's dead, the mystery is where is the $200+ million. [1] https://news.ycombinator.com/item?id=19291712 https://news.ycombinator.com/item?id=19291712
- thaumasiotes 8y ago> Quadriga’s platform data is stored on the cloud with Amazon.com’s Amazon Web Services, or AWS. While Jennifer Robertson, Cotten’s widow, has asked for access to the data, she has been denied because it was in his name rather than registered under the company. Ernst & Young has requested the court grant an order authorizing access. ...is she not his heir? What's happening there?