Briefing

Regulator finds Quadriga founder lost millions via fraudulent trades

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The Ontario Securities Commission investigation determined Gerald Cotten, who ran what was Canada’s largest exchange for trading digital currencies like Bitcoin, created puppet accounts and credited them with cash he hadn’t deposited, then used $115 million in client funds to cover his losses. He also lost $28 million trading on rival platforms, and spent more customer cash on his lifestyle. (The Globe & Mail, Financial Post)

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Talking point: The regulator isn’t bringing an enforcement action, citing Cotten’s December 2018 death and Quadriga’s bankruptcy. But its work tracking down the missing funds—trustee EY has found only $46 million of the $215 million in client funds owed—suggests users won’t be getting their money back.