What happened
QuadrigaCX announced on January 14, 2019 that its CEO, Gerald Cotten, had died in India on December 9, 2018. On February 5, 2019 the Nova Scotia Supreme Court granted creditor protection and appointed Ernst & Young as Monitor; the companies were assigned into bankruptcy on April 15, 2019.
OSC staff concluded the collapse “resulted from a fraud” by Cotten, who opened accounts under aliases, credited himself with fictitious balances and traded them against clients, covering losses with other clients’ deposits. Staff said Quadriga “operated like a Ponzi scheme”.
Quadriga told clients it stored 99% of coins in cold storage. Staff found that untrue: most assets sat in hot wallets and on other platforms. Staff also found it was not the case that most losses came from keys lost at Cotten’s death, and that Quadriga most likely would have collapsed even if he had lived.
These are OSC staff findings published on June 11, 2020; they are not findings of an OSC hearing panel or a court.
Scale, from official records
- $215 million owed to clients at the filing; $46 million recovered or identified; at least $169 million lost (OSC staff review, 2020-04-14)
- About $115 million of the shortfall from fraudulent trading on the platform and about $28 million from unauthorized trading on external platforms (OSC staff review, 2020-04-14)
- More than 76,000 clients owed money; data on more than 368,000 client accounts analysed (OSC staff review, 2020-04-14)
The Canadian angle
A Canadian exchange with more than 76,000 clients owed money, about 40% of them in Ontario, according to the Ontario Securities Commission. Quadriga was not registered with any securities regulator.
What broke
No segregation of client assets, false cold-storage claims, one person controlling everything, no books or internal controls, fictitious balances, and no registration.
What a user could have checked
- Whether the platform was registered with a securities regulator: today, use the platform checker.
- Whether custody arrangements were disclosed and independently verifiable.
- Withdrawal delays: OSC staff said that in its final months Quadriga operated “like a revolving door”.
- Whether reported trading volumes were real.
Recovery
The trustee declared a first interim dividend of 13.094156% of each proven claim on May 12, 2023, keeping a reserve and stating a final distribution would follow later. We have not confirmed a final distribution on a trustee or court document.
Sources
- QuadrigaCX: A Review by Staff of the Ontario Securities Commission — Ontario Securities Commission (staff), 2020-04-14
Supports: Fraud finding, Ponzi description, cold-storage misstatements, $215M/$46M/$169M and breakdown, 76,000 clients, registration status, timeline · checked 2026-11-01 - OSC publishes investigative report of QuadrigaCX — Ontario Securities Commission, 2020-06-11
Supports: Publication date, about 40% Ontarians · checked 2026-11-01 - Notice to Creditors: Second Interim Status Report — Ernst & Young Inc. as Trustee (hosted by Representative Counsel), 2023-05-12
Supports: CCAA and bankruptcy dates; 13.094156% interim dividend; final distribution to follow · checked 2026-11-01