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Both choices were laudable and rare among the exchanges in 2015, when she was fired after six months of advice on regulatory issues. She says the CEO, Gerald Cotten, wanted to leave his status as a publicly traded company and get rid of all types of "law and order". She says that the company is made up of four companies in total and that four shareholder groups therefore have a stake in Quadriga's badets.
Before the company was hired by Quadriga, the company thought it was inadvertently involved in a pumping program.
"I think the entire QuadrigaCX team came to think that the company may have involuntarily participated in a pumping and unloading program in Vancouver. It's not for me to say if it was before, but I can say that QuadrigaCX was led by tech geeks, competitive, ambitious and smart but not familiar with the Vancouver financial market ecosystem. . "
Quadriga then stalled on numerous shareholder agreements. At the same time, some shareholders at least have never received a dollar.
"At the time of our departure, in early 2016, there were only a few shareholders left and shareholder lists available to the public do not seem to be up to date. Three shareholders recently told me that they had never been called to an annual general meeting and that they had not received as much as a dividend from the company. A dollar from QuadrigaCX in three years, despite its apparent profitability. "
To make the company totally private, Cotten eliminated everyone involved in compliance or regulation. In the same way, says Duhaime, society has gone from as strict a regulation as possible to anarchy.
"From that point on, Mr. Cotten only took QuadrigaCX and managed the stock exchange as if he had no investor, no shareholder, no regulator and no law that applied – no corporate law, no law on laundering and no contract law. I do not know why Mr. Cotten decided to avoid the regulatory right, but I never spoke to him after that day. "
As CCN reported previously, Cotten himself controlled most of the encrypted portfolios in the exchange. It was this fatal flaw in the security model that led to an alleged mbadive loss of funds after his death in December 2018. More than $ 250 million (CAD) in outstanding claims of more than 110,000 people were filed against Quadriga . still need to be taken to ensure the protection of the remaining funds. She writes:
"I do not know if there are $ 137 million parked in some portfolios; I do not know why the bitcoin addresses that were supposed to contain $ 92.3 million remained empty; I do not know why the address of the wallet containing $ 44.7 million of other cryptos can not be disclosed; I do not know why no law firm has asked for an injunction from Mareva to preserve its badets; I do not know why the litigation is taking place in Nova Scotia, when the courts in British Columbia are competent, and the witnesses and evidence are in British Columbia. […]"
Duhaime said she was reluctant to write an article on QuadrigaCX on her blog, but hopes it will raise awareness of the need for better regulation of trade. It did so because "the badets of the clients held by the stock exchanges must be subject to increased regulation and supervision, and unless we improve the accuracy of the information available." […] "
The final resolution of QuadrigaCX can take years to settle. Up to here, this seems to be a more curious version of Mount. Gox, with more intrigues surrounding the founder and his death. After the announcement of his death and lack of access to funds, some people believed that the founder had simulated his death. In addition, it appeared that Gerald Cotten had used his personal fortune to keep the exchange afloat and rebadure clients as the exchange was disputed with a major Canadian bank about his account.
The history of QuadrigaCX and other centralized exchanges that have not suddenly been able to handle withdrawals should not be taken lightly. It illustrates the need for decentralized exchanges or, at the very least, solutions like Arwen, which allows clients and exchanges to split the custody of funds during transactions and to prevent bad actors from stealing funds.
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