In theory, stealing cryptocurrency should be impossible. But a mystery has emerged that seems to throw all that into question and even suggests a bigger, much stranger conspiracy.
Gerald Cotten, the founder of cryptocurrency exchange QadrigaCX, died in December in India. He was believed to have left $136 million USD worth of crypto-cash in ‘cold wallets’ on his own laptop, to which only he had access. However, investigators from EY, who have been working on closing QuadrigaCX following Cotten’s death, were surprised to find that the wallets were empty. In fact, it’s believed crypto-cash had disappeared from them months before Cotten died.
A cryptocurrency mystery now involving the FBI
The only lead in this mystery is the fact that the EY investigators have found other user accounts that appear to be linked to Gerald Cotten. There’s a chance that Cotten used these to trade on his own exchange, but the nature of these exchanges remain a little unclear.
To add to the intrigue, Fortune reported yesterday that the FBI are working with Canada’s Mounted Police Force to investigate the missing money. This information came from Jesse Powell, CEO of another cryptocurrency company called Kraken. Powell told Fortune that both the FBI and the Mounted Police have been in touch with him about the mystery surrounding QuadrigaCX.
Powell has offered a reward of $100,000 to anyone that can locate the missing cryptocurrency funds.
So what actually happened to Gerald Cotten and his crypto-cash?
The story has many layers of complexity. There are rumors that Cotten faked his own death. For example, Cotten filed a will just 12 days before his death, leaving a significant amount of wealth and assets to his wife. And while sources from the hospital in India where Cotten is believed to have died say he died of cardiac arrest, as Fortune explains, “Cotten’s body was handled by hotel staff after an embalmer refused to receive it” – something which is, at the very least, strange.
It should be noted that there is certainly no clear evidence that Cotten faked his own death – only missing pieces that encourage such rumors.
A further subplot – that might or night not be useful in cracking this case – emerged late last week when Canada’s Globe and Mail reported that QuadrigaCX’s co-founder has a history of identity theft and using digital currencies to launder money.
Where could the money be?
There are, as you might expect, no shortage of theories about where the cash could be. A few days ago, it was suggested that it might be possible to locate Cotten’s Ethereum funds – a blog post by James Edwards, who is the editor of cryptocurrency blog zerononcense claimed that Ethereum linked to QuadrigaCX can be found in Bitfinex, Poloniex, and Jesse Powell’s Kraken.
“It appears that a significant amount of Ethereum (600,000+ ETH) was transferred to these exchanges as a means of ‘storage’ during the years that QuadrigaCX was in operation and offering Ethereum on their exchange,” Edwards writes.
Edwards is keen for his findings to be the starting point for a clearer line of inquiry, free from speculation and conspiracy. He wrote that he hoped that it would be “a helpful addition to the QuadrigaCX narrative, rather than a conspiratorial piece that speculates on whether the exchange or its owners have been honest.”