QuadrigaCX debacle: Truth or exit scam?; the community responds

03 Feb, 2019 | Updated: 03 Feb, 2019
by Will Heasman
Opinion
QuadrigaCX debacle: Truth or exit scam?; the community responds

The latest crypto drama unfurling within the space, is the shutdown of the crypto exchange QuadrigaCX, the subsequent loss of $190 million in user funds following the death of its founder, and now the fairly concrete allegations of an exit scam…

In dribs and drabs the possible failings, drama or perhaps calculated malfeasance from the Canadian crypto exchange, QuadrigaCX, have been emerging and spreading throughout the crypto community.

The story so far…

First, there was the news that at the end of last month - following exchange downtime - that  the founder of QuadrigaCX, Gerry Cotton, had sadly passed away; this was followed by the next day by the revelation that over $190 Million worth of crypto had vanished, apparently thanks to the poor storage management. The only person who had access to the funds - Mr. Cotton -  was now dead. This caused hubbub of confusion, and led many on social media cry: ‘exit scam’. 

Read more: Canadian crypto exchange QuadrigaCX goes offline, Reddit screams 'Exit Scam'

And as it turns out, the conspiratorially minded among us may have it right; it was noted that transactions were being made from the companies supposedly inaccessible cold wallets…

The community reacts

Over the past few days, the social media circles of crypto have honed in on the aforementioned fiasco, offering opinions on what could have been done to avoid this catastrophe and positing perspectives on what may have occurred.

Refraining from accusations of an exit scam, Meltem Demirors, an executive at CoinShares fixated upon the issue of crypto storage management, calling for reform:

CEO of Binance, CZ, offered his opinion on exchange safety; allaying the fears of his users, and adding that he himself was in good health:

Read more: Changpeng Zhao, about QuadrigaCX: never have CEO carry private keys

Some noted that this situation may actually be a larger symptom of the current insolvency unfurling within the crypto industry, especially following the closure of contemporary companies:

Prominent cryptographer, Peter Todd, noted that an ‘Exit scam’ may actually be carried out by the family or employees of the exchange, rather than the founder himself:

Investigations underway  

Jessie Powell, the CEO of the Kraken exchange alongside a myriad amateur sleuths have started looking into the situation:

It appears that for now, it remains a waiting game; one thing is for certain, with this level of scrutiny on the situation, the truth will certainly out.

Keep tuned to Chepicap for all the latest developments on this story and more.

Read more: Did QuadrigaCX lie about its back up wallets in order to liquidate?; Canadian crypto exchange QuadrigaCX owes $190 million to customers 

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