Investigative report into QuadrigaCX is now out

The ontario securities commission (which plays a similar role to the SEC in the US), has publicly released the results of their investigation into the collapse of QuadrigaCX. Of note:" Staff determined that Quadriga collapsed due to a fraud committed by Cotten. Cotten opened accounts under aliases and credited himself with fictitious currency and crypto asset balances, which he traded with unsuspecting Quadriga clients. Cotten sustained real losses when the price of crypto assets changed, thereby creating a shortfall in assets available to satisfy client withdrawals. Cotten covered this shortfall with other clients’ deposits – in effect, operating a Ponzi scheme. Staff calculated that the bulk of the $169 million in client losses – approximately $115 million – arose from Cotten’s fraudulent trading. "​" Staff also determined that Cotten misappropriated millions in client assets to fund his lavish lifestyle.OSC Staff would likely have pursued an enforcement action against Cotten and Quadriga. However, this is not practical given that Cotten is deceased and Quadriga is bankrupt, with its assets subject to a court-supervised distribution process."​The full report, and the press disclosure is in the link below: https://www.osc.gov.on.ca/en/NewsEvents_nr_20200611_osc-publishes-investigative-report-quadrigacx.htm​Another link, more user friendly, still an official osc link: https://ift.tt/3cV2Q2S

Submitted June 11, 2020 at 10:54PM