back to article Remember that crypto-exchange boss who mysteriously died after his customers' coins disappeared? Of course he totally stole them

Gerald Cotten, the late Quadriga CEO, created a string of accounts on his Canadian cryptocurrency exchange, each under an alias and containing bogus dollar balances, according to Ernst & Young auditors. He then used those accounts, it's claimed, to buy his customers' cryptocurrency with those digitally conjured dollars that didn …

  1. veti Silver badge
    Facepalm

    I am shocked

    Shocked, to hear that financial instruments created specifically to avoid regulation are being used to... avoid regulation.

  2. Anonymous Coward
    Anonymous Coward

    How convenient to have "died" when he did

    1. Saruman the White

      If he really did die ....

      1. veti Silver badge

        Well, let's see. He emptied a lot of other people's accounts, in a manner that is trivial to detect if you have access to the records, then - took the key with him on holiday to India, and next thing anyone knows he's "dead" and the accounts can't be accessed.

        The timing is suspicious, to say the least.

        Of course, since Ernst & Young have evidently hacked the accounts, it's also possible they've helped themselves to the money and set the guy up. But I'm discounting that because E&Y are still here, and their reputation is worth more - despite everything - than the contents of a few crypto wallets.

        1. Nick Kew

          If you want to go down that line of conspiracy theory, individuals within Ernst&Young might turn rogue. After all, that's what appears likely to have happened at Quadriga.

          Of course, the difference is circumstantial. The reason we don't suspect someone at E&Y is that it's vanishingly unlikely that the individuals who may have been presented with an opportunity had also engineered the situation where that opportunity arose. They were investigative beancounters tasked with a job they could scarcely have anticipated!

        2. oiseau Silver badge
          Holmes

          Petit détail

          ... and their reputation is worth more - despite everything ...

          Indeed ...

          Despite everything. ---> Juste un petit détail.

          O.

        3. Anonymous Coward
          Anonymous Coward

          "Of course, since Ernst & Young have evidently hacked the accounts, it's also possible they've helped themselves to the money and set the guy up."

          E&Y never had to hack the accounts. They just bill dying companies to death. I'm sure the investigation into Quadriga was thorough up until the money run out. It's not fraud, it's consulting.

          The only possibility of anything suspicious would have been individuals within E&Y but the difference between Quadriga and E&Y is that no one in E&Y would have trusted one of their own to handle any of the accounts/keys/etc without supervision.

      2. Anonymous Coward
        Coat

        Brings a whole new meaning to "being dead for tax purposes"

        Trillian?? Pass me my 3 armed coat.

        1. BebopWeBop Silver badge

          and both hats

      3. JustWondering

        Did anyone see the body?

        1. Anonymous Coward
          Anonymous Coward

          >" Did anyone see the body?"

          Good question. India is, after all, an easy place to fake ones own death.

      4. Anonymous Coward
        Anonymous Coward

        If he isn't dead .

        There are probably a few customers who will ensure he soon will be.

    2. Persona Silver badge

      If he hadn't died he would never have been caught. This is a crypto cash variation of a common financial fraud. It relies on being able to syphon money across from another clients account should the original client he robbed come looking for their money. It's exactly why financial workers are required to take a two week continuous vacation every year.

      1. Pascal Monett Silver badge

        Yes he would have. The thing is, he wasn't smart, he was just ideally positioned. His theft was an opportunistic one. The fact that there was no one to control his acts is the deciding factor, I think. He saw all that money, realized that he could do whatever he wanted, and did so.

        In doing that, he was setting himself up for his own downfall. When you become a high roller, the mundane precautions of staying inconspicuous become grating before very long. Sooner or later, he would have wanted to drive a Ferrari, and people would have started asking questions. Sooner or later, someone would have wanted their money, and his troubles would start.

        He would have been caught.

        1. Alan Brown Silver badge

          "He saw all that money, realized that he could do whatever he wanted, and did so."

          Not exactly the first time a money handler has decided to do this - and it won't be the last time.

          Bitcoin (and other cypto currencies) just make it easier than creating a South Sea Bubble, but there are ALWAYS greedy and gullible investors coming along - who will helpfully act as schills to sell even more of the worthless stuff - we all work with some hopeless gambling addict who's constantly buying into these scams (my reply is usually "Tulips! tulips!")

          https://www.historic-uk.com/HistoryUK/HistoryofEngland/South-Sea-Bubble/

        2. LDS Silver badge

          He could still be caught - one day he will surface in some far East or South American country, I guess... the issue will be how many money will be left.

          1. Michael Wojcik Silver badge

            one day he will surface in some far East or South American country

            I think it's equally likely that Cotten is dead, and Robertson or someone else has the money. Carrying out a massive and not particularly subtle fraud is a good way to attract predators, some of whom may be better at this sort of thing than you are.

        3. Doctor Syntax Silver badge

          "Sooner or later, he would have wanted to drive a Ferrari"

          Maybe he is, but where and under what name?

        4. Anonymous Coward
          Anonymous Coward

          "His theft was an opportunistic one. The fact that there was no one to control his acts is the deciding factor, I think. He saw all that money, realized that he could do whatever he wanted, and did so."

          From what I have read, Quadriga was promising investors returns that they couldn't deliver. Initially they tried to chase higher returns with riskier positions and they fell further behind. They couldn't even return the original investments.

          By the time Cotten disappeared, the accounts had C$32m when C$220m had been invested. The majority of the moeny appears

          I don't think the theft was an opportunistic one, I think it was a last resort. That's motivation based, not justification.

          1. JLV Silver badge

            So, basically, crypto-enabled Ponzi scheme exit play.

            Somehow that death seems quite convenient. Watch the wife, if she was in on it, she won’t be happy with asset recovery for long.

            Also, given a disease that is dangerous but not usually associated with sudden death, why did he not take steps beforehand to arrange password viability?

            1. Anonymous Coward
              Anonymous Coward

              "So, basically, crypto-enabled Ponzi scheme exit play."

              I suspect it was an investment scheme which quickly turned into a failing investment scheme, which moved onto "one last gamble" investment scheme,

              While it likely became a Ponzi scheme for some (I'm assuming more money was being invested as they were losing everything), that would likely be down to timing.

              The high exchange fees and lack of liquidity in the crypto markets meant that when they tried to execute their trading strategies, they were buying at prices they expected but not selling at the expected prices.

              Effectively, they brought high and sold low. Repeatedly.

            2. John Robson Silver badge

              "Also, given a disease that is dangerous but not usually associated with sudden death, why did he not take steps beforehand to arrange password viability?"

              As you say - not usually associated with sudden death.

              You don't need Crohn's to have a password vault set up with a known way to access it for some third party.

        5. Persona Silver badge

          People do get away with the non crypto version of this fraud, Curiously the ones that get caught are often found to have started out convincing themselves they are just borrowing the money and will pay it back when they can. And sometimes they do. How do we know? Because they do it again and mess up in some way. It's only than that the ensuing financial audit finds that they have successfully committed fraud years earlier. Given that some get away with it at least one without being caught they must be some who stop after their first success.

          His plan might well have been to wait until the price of bitcoin was much much lower, He would then be able to pay it back with loose change. Till then he could get away with it by shuffling it between carefully chosen clients.

          1. Michael Wojcik Silver badge

            Curiously the ones that get caught are often found to have started out convincing themselves they are just borrowing the money and will pay it back when they can

            Or like Ponzi himself (before he lost control of the business), are basically innumerate and just looking at a big pile of money thinking everything is fine. Ponzi didn't set out to commit fraud; he just had a deadly combination of naivite (his original investment idea didn't have anything close to the potential return he thought it did, and he did basically no bookkeeping when investments started rolling in) and popular appeal - the latter because he was genuinely convinced his plan was working.

            There's a good, detailed treatment of Ponzi in Ponzi Schemes, Invaders from Mars, and More Extraordinary Popular Delusions and the Madness of Crowds, a sort-of sequel to Mackay by Joseph Bulgatz.

      2. Doctor Syntax Silver badge

        "It's exactly why financial workers are required to take a two week continuous vacation every year."

        Nothing suspicious about booking that holiday to somewhere that coincidentally doesn't have an extradition arrangement. Or somewhere where you can conveniently be declared dead and buried (or for preference cremated) before you're due back.

        1. c1ue

          Not disagreeing with what you said, but the 2 week vacation refers to anti-fraud best practices

        2. Persona Silver badge

          I recall a talk that touched on fraud at a firm I had just started working for. It was given by a very senior person in the firm. He said 9 out of 10 people were honest or too scared to commit the crime so you could leave a pile of money on their desk and they wouldn't take it. He then followed it up by saying that out of the 10% who would take the money only one in 10 of them was willing to live in South America for the rest of their lives. I don't think he had any figures to back it up but I've pondered on those numbers many times and they feel about right. To put it in perspective I was one of about 6000 employees, so by his numbers 60 would take the money and run. The goal was to not provide them with the opportunity and make them believe that they would get caught.

          I'm aware of 5 who committed financial fraud and were caught (4 not on the first time) and of the 5 only one had bought the tickets to a place without an extradition treaty. Incidentally that fraud involved "teeming and lading" with no way to ever pay it back so cut and run was the only option . I don't know how many got away with it.

    3. Doctor Syntax Silver badge

      How convenient to have "died" when he did

      Or to put it in terms of the headline, did he totally die?

    4. kain preacher

      Or lets go wild. So criminals were using this to launder money. They found out and well he is dead

      1. doublelayer Silver badge

        That's unlikely. If he was killed by someone else, they would have had to go to a lot of trouble to get the death ruled natural. His business partners and family members, those who are having property taken to make up the debt, would announce immediately if there were any suspicious parts of the death so they could delay or even prevent their property being seized under the theory that whoever was responsible for his death could also have stolen the money. Since they're not doing that, this leaves only two logical options: 1) he actually did die and you figure out the details that make that work or 2) he stole the money and faked the death, and the company either knows about it or have given up on being able to catch him.

        While the first option is possible in that he could have lost the money through some other means and then died coincidentally, possibly aided by stress after losing all the money, the second option is a lot more logical, especially with the small number of large withdrawals as described.

    5. macjules Silver badge
      Childcatcher

      Gerry died due to complications with Crohn's disease on December 9, 2018 while travelling in India, where he was opening an orphanage to provide a home and safe refuge for children in need.

      Gerry cared deeply about honesty and transparency–values he lived by in both his professional and personal life.

      Sounds like a combination of Reginald Perrin and Bernie Madoff with a drizzle of Fagin.

      1. Michael Wojcik Silver badge

        Gerry cared deeply about honesty and transparency and avoided them as much as humanly possible.

        If you buy Quadriga's / Robertson's story, Cotten had the only copy of the passphrases for the company wallets. That is not the move of someone honest and transparent.

  3. TsVk!

    Wrong career...

    I should have been setting myself up to "die" in this manner since school.

    1. Fred Flintstone Gold badge

      Re: Wrong career...

      Yes, you would have made a killing.

      No, wait ..

      :)

  4. Michael Hoffmann
    Meh

    Cherchez la femme?

    I'd presume they are still watching the wife? Or is she just another dupe, when hubby decided he'd rather spend his ill-gotten gains with a hareem full of younger, nubile women?

    And the medical practitioner who wrote the death cert. Is he now suddenly driving a Lambo? Or did he meet an untimely end?

    What's that saying? Never believe a man is dead until you have seen his corpse?

    1. Mark 85 Silver badge

      Re: Cherchez la femme?

      Was he even a real person? With all the fictitious accounts what would be one more only this is one the one that runs the whole thing. And yes, they should be watching the "wife". In this day and age, I find hard to believe that someone disappeared and didn't leave a paper trail. If he did die then the money has to be someplace.

      Just seems suspicious that someone who took that much money disappeared with all the money. Was it cash? Banking accounts? As for the account passcodes, I'm assuming they'd need to be more complex than "password1234".

      1. KBeee

        Re: Cherchez la femme?

        With fake account names like "R2D2" and "C3PO" maybe password1234 might be worth a try. Or hansolo1234

        1. Anonymous Coward
          Anonymous Coward

          Re: Cherchez la femme?

          It depends on whether or not those are the droids that they're looking for

          1. Tom 64

            Re: Cherchez la femme?

            My eyes just rolled so far back in my head they almost performed a 360.

        2. phuzz Silver badge

          Re: Cherchez la femme?

          When I read those fake names, my first thought was that his passwords are all probably Star Wars references.

        3. Jamie Kitson

          Re: Cherchez la femme?

          Is there a joke/Star Wars reference to _Chris Markay_?

          1. John Brown (no body) Silver badge
            Joke

            Re: Cherchez la femme?

            I think he played the 5th Tuscen Sand Raider (uncredited, non-speaking part)

        4. Dave559 Bronze badge

          Re: Cherchez la femme?

          Did anyone check if the password was THX1138?

    2. JLV Silver badge

      Re: Cherchez la femme?

      New Rose Hotel, William Gibson. The bit where all their ill-gotten e-cash evaporates once Maas’ scam is recognized.

      I am really down on Gibson here, he should have seen the cryptocurrency scams coming 30 years ago ;-) Seriously, he’s had pretty good form, for someone who, as far as I can tell, is not a techy in the least bit.

      This is right up his alley. Right up PT Barnum’s too, come to think of it.

      1. Alan Brown Silver badge

        Re: Cherchez la femme?

        "someone who, as far as I can tell, is not a techy in the least bit."

        You got that right. Neuromancer was banged out on a _MANUAL_ typewriter.

        1. Anonymous Coward
          Anonymous Coward

          Re: Cherchez la femme?

          Manual typewriters work great as input devices for OCR input. Don't tell the computer companies. Even worse, manual typewriters don't even need electricity. Don't tell the power companies!

        2. JLV Silver badge

          Re: Cherchez la femme?

          Didn’t know that. To be fair, in 1984, word processors were pretty sparse. Burning Chrome came out in 82.

          He wasn’t rich either, IIRC: US “refugee” in Canada, did odd jobs, smoked lotsa weed, found the right people who recognized his talent.

          1. LDS Silver badge

            "in 1984, word processors were pretty sparse"

            WordStar appeared in 1978 - the DOS version in 1982. Both the PC and the software itself were not cheap, though.

    3. iron Silver badge

      Re: Cherchez la femme?

      There is no death cert, he (supposedly) died in India and the body was cremated leaving no trail or evidence.

      1. BebopWeBop Silver badge

        Re: Cherchez la femme?

        Widely predicted (both the theft ad the 'death' I seem to remember on these forums (and probably within E&Y)

        1. Michael Wojcik Silver badge

          Re: Cherchez la femme?

          Widely predicted among anyone who heard even a summary of the original story, I'd expect. The question was never if someone was lying; it was who and about precisely what. But likely we'll never know most of it. We may never find out whether Cotten's really dead, or who1 has the money, or who knew what before it all went to hell.

          1Possibly no one, since with cryptocurrencies it's all too easy for people to screw up and kill everyone who knows the passphrases.

      2. zuckzuckgo Bronze badge

        Re: Cherchez la femme?

        Sounds more like a virtual death. He has joined that blockchain in the sky.

    4. fidodogbreath Silver badge

      Re: Cherchez la femme?

      What's that saying?

      Never believe a man is dead until you have seen and DNA-tested his corpse.

  5. The Nazz Silver badge

    Love the name ....

    Aretwo Deetwo.

    If you're gonna make up ficticious names you may as well have some fun.

    Not that it can be much fun dying. So i guess.

    1. Aristotles slow and dimwitted horse Silver badge

      Re: Love the name ....

      Reminds me of the whole Enron and Andrew Fastow fiasco where he named all of his structured vehicles for hiding the mounting debts such names as Death-star and Chewco etc. etc.

      1. Intractable Potsherd Silver badge

        Re: Love the name ....

        From this, can we say that money-men who are fans of Star Wars should be treated with suspicion?

        1. John Brown (no body) Silver badge

          Re: Love the name ....

          Depends on if they have clients with enforcers called Greedo and who shoots first.

  6. Tromos
    Joke

    What did he do wrong?

    As I see it, he used digitally conjured dollars to buy some other digitally conjured currency. Was it the exchange rate that his customers are complaining about? Was it even worse than an airport foreign exchange?

    1. Anonymous Coward
      Anonymous Coward

      Re: What did he do wrong?

      Did he have a government authorised banking licence?

  7. doublelayer Silver badge

    Responsibilities

    Clearly, he is almost certainly guilty of massive theft and would have to repay as much as he could if we could find him. I'm wondering, however, what responsibility the rest of this company and its employees should or do have. If, for example, no accounting records were kept since 2016, it implies that the employees of the company were not doing their duties to prevent fraud or keep the company functioning. I'm not exactly sure what exactly they were doing before and after all the money disappeared, but it would seem that they have a lot to answer for, potentially with significant fines as well.

    1. lglethal Silver badge
      Go

      Re: Responsibilities

      Lets keep in mind here this is a completely unregulated industry. It is (right now) not regulated by the banking requirements, and as such can be run as ineptly (or fraudently) as any business out there. Records would only need to be kept in so far as they are related to taxable income, and so long as those were in check, then I doubt there is very much that the employees could be held liable for.

      Anyway, if I remember correctly from the earlier reporting, basically everyone else were just sales people to sell the exchange, so didnt actually have anything to do with the running of it. That was all on cotton. I might be wrong though...

      Oh and the wife should definitely be held to account, I do not believe for a second that someone can commit massive fraud over multiple years and there spouse not know about it!

      1. Anonymous Coward
        Anonymous Coward

        Re: Responsibilities

        "Oh and the wife should definitely be held to account, I do not believe for a second that someone can commit massive fraud over multiple years and there spouse not know about it!"

        It is certainly possible - vast amounts of money can be spent with little to show (e.g. by functioning drug/gambling addicts). In my own family's example (dad, enormous gambling debt) everything appeared "fine" until the debt was called in and parents divorced.

  8. Citizen99

    Obligatory Hitchhiker's Guide

    Mr.Desiato is currently dead, for tax reasons.

    1. Sane

      Re: Obligatory Hitchhiker's Guide

      I get the reference but I wonder if the illustrious Mr Adams* might have found inspiration for that line elsewhere. I remember listening to Monty Python's Instant Record Collection a year or two before H2G2 had its first run on the radio. I'm sure I remember a point in the recording at which one of the Pythons (can't remember which) describes John Cleese as "spending a year dead on Mars for tax reasons".

      *Had the good fortune to meet him once and have nothing but admiration for the man. Not trying to take anything away from him now. Just curious. Then again, great minds, etc...

      Come to think of it, my memory might be just a tad hazy after all this time. Maybe Adams was first with the gag...

  9. Ozumo

    Baron Vladimir says

    "You've seen the bodies?"

    1. Anonymous Coward
      Anonymous Coward

      Re: Baron Vladimir says

      well, "somebody" claims to have seen the bodies, which happened to be cremated and, no doubt, scattered by the grieving wife.

      His failure (eventually) with this scan is that it's just too perfect not to have raises suspicions. In the long run, he'll probably be caught, trying to live off-grid in south-east Asia. But then, again, 800 million can buy you a lot apart from a yacht. A bullet-proof identity, for example. But, apparently it's very hard to resist an urge to go back to your previous contacts, so yes, one of those days, he will be caught.

      1. James Anderson Silver badge

        Re: Baron Vladimir says

        South East Asia is out.

        Really strict beurocratic emigration controls in any of the countries you would want to live in.

        You could always bribe your way in but with inflation etc. $800 would disappear pretty quick.

  10. Aristotles slow and dimwitted horse Silver badge

    Alternatively...

    Alternatively... perhaps he's dead? Just like it says in the story.

    1. Alan Brown Silver badge

      Re: Alternatively...

      Dying of Crohn's disease anywhere in the world is unusual - even in India. It takes _decades_ of suffering the disease without medical treatment to have that effect.

      If you're sick enough that you'd die of complications, then there's no way you'd be well enough to be travelling in the first place.

      The "death" has about the same ring of truth about it as the account names.

      1. dajames Silver badge

        Re: Alternatively...

        The "death" has about the same ring of truth about it as the account names.

        Was the doctor who certified the death a plastic surgeon, by any chance? This seems to be one of those times when a new face would be an asset!

        1. Anonymous Coward
          Anonymous Coward

          Re: Alternatively...

          Was the doctor who certified the death a plastic surgeon, by any chance?

          Nah - definitely a rubber surgeon (possibly spelled "robber").

      2. DCFusor Silver badge
        Joke

        Re: Alternatively...

        You *could* translate that as "death by being full of sh*t" which in this case has a macabre humor all its own - true or otherwise.

      3. Korev Silver badge

        Re: Alternatively...

        A quick google suggests Crohn's itself is unlikely to kill you; but the infections and cancer that it can trigger could.

      4. Anonymous Coward
        Anonymous Coward

        Re: Alternatively...

        Actually, not necessarily. Mine went unchecked for a little less than 3 years from 2013 to 2016 (after a duff diagnosis from a local doctor in Vancouver). It's been just over a year since having my entire colon removed due to pre-cancerous cells being found throughout which had a 98% chance of becoming aggressive, unpredictable cancer within 3 years. By the time I was forced to get a second opinion, my surgeon and GI were already doubtful of being able to save any of it and, sure enough, they were right.

        But yes, a little odd that his disease went from "able to travel" to dead without a fairly lengthy and debilitating period in between.

    2. Anonymous Coward
      Anonymous Coward

      Re: Alternatively...

      I'd believe Donald Trump before I believed THAT!

  11. Anonymous Coward
    Anonymous Coward

    Maybe MOSSAD could help ?

    They are *very* good at tracking down "dead" people ...

    I'll add my voice to the chorus having problems believing the "he's dead" part of this story. It's an interesting thought experiment, but I reckon with £2-3 million, I could "die" and switch to a new identity for the rest of my life (hopefully at least 30 years).

    1. Citizen99

      Re: Maybe MOSSAD could help ?

      "They are *very* good at tracking down "dead" people ..."

      ...and rectifying the anomaly.

    2. Anonymous Coward
      Anonymous Coward

      Re: Maybe MOSSAD could help ?

      That's just it though: anyone, with a million or so, could "die", build a new identity, and live out their lives discreetly in some remote area. And if you otherwise had no prospects, or were deeply in debt or in some other unpalatable circumstance, stealing the money to do so would be an attractive option.

      However. The key word here is "discreetly". If you want to retire young without doing much work, and happen to have a cryptocurrency exchange handy, the discreet move is to slowly siphon off the money in the form of (disclosed) fees. When you accumulate the C$1m or so that you need, a couple years should do it, you sell the exchange to some sucker and head for Yukon to spend the rest of your life both literally and figuratively off the grid.

      Stealing C$32m, faking your death, leaving your wife behind to either take the fall or complete the plan, and jetting off to heaven knows where with your loot while the newspapers froth... I'd say you've already failed at discretion there. And someone who steals that much money is sure to have expensive tastes, which will be noticed no matter where you go. Southeast Asia isn't a great hiding place for a foreigner, and in the remote regions of the world that are good hiding places, the lifestyles of the rich and famous are either simply impossible or so noticeable that you'll be caught in weeks. Involving Mossad would only accelerate the inevitable.

  12. Phil O'Sophical Silver badge

    "real cryptocurrency was transferred out."

    real cryptocurrency? What's that?

    1. Pascal

      Re: "real cryptocurrency was transferred out."

      *something something blockchain something*

    2. Tom 64

      Re: "real cryptocurrency was transferred out."

      As opposed to the fake USD he padded his books with to purchase the crypto.

  13. DontFeedTheTrolls Silver badge
    Coat

    Who's face would you choose...

    Elise Clifton-Ward (Angelina Jolie): 20 million dollars worth of plastic surgery. And that's the face you choose.

    Frank Tupelo (Jonny Depp): You don't like it?

    Elise Clifton-Ward: It will do.

    The Tourist

  14. Ian Johnston Silver badge

    Ernst & Young said it only about one per cent of these deposits had supporting documentation, and concluded all the other deposits were "not represented by actual fiat or cryptocurrency."

    You see, that's the great thing about cryptocurrencies. A host of people round the world fight to validate every transaction, so fraud is literally impossible.

    1. Throatwarbler Mangrove Silver badge
      FAIL

      Signs point to you being very wrong indeed. Either that, or I have missed your sarcasm.

    2. theblackhand Silver badge

      "A host of people round the world fight to validate every transaction, so fraud is literally impossible."

      I'm sure that will reassure the 76,000 investors who have lost >85% of their investments through fraud.

    3. Carpet Deal 'em Bronze badge

      A public ledger doesn't make fraud impossible; it makes it much easier to track the stolen funds, but that doesn't guarantee you'll catch the guy.

  15. Anonymous Coward
    Anonymous Coward

    "The auditing firm found that Cotten made fiat currency deposits not backed by any actual cash into his own accounts on Quadriga, and used these fictitious funds to seemingly buy his own customers' actual cryptocurrency,"

    Isn't this just like the Federal Reserve printing money not backed by anything of physical value?

    And isn't the whole basis of "Fiat" currency just a Panzi scheme but on a more massive scale?

    1. lglethal Silver badge
      Facepalm

      i dont know what a Panzi scheme is - does it involve multiple German Tanks?

      1. Cardinal

        i dont know what a Panzi scheme is

        @lglethal

        It's a limp-wristed Ponzi scheme.

        1. Neil Barnes Silver badge

          Re: i dont know what a Panzi scheme is

          If it's Fiat currency, it's surely a Panda scheme, no?

    2. Anonymous Coward
      Anonymous Coward

      Isn't this just like the Federal Reserve printing money not backed by anything of physical value?

      I think it's more like the hollow swap telecomms scandal a way back. Selling back and forth.

    3. MyffyW Silver badge

      Fiat currency just a Ponzi scheme? Not in a well-functioning democracy, where the controlling interests have to face the judgement of the masses periodically.

      On the other hand, the number of well-functioning democracies these days is not a large number.

    4. Mike007
      Mushroom

      The difference between "fake" and "real" money depends on whether or not you have the assets to back the currency that you have issued.

      Historic fiat currencies used to be backed by vaults full of silver and gold reserves, which would be accepted as payment around the world in exchange for needed resources.

      The problem arose that there were insufficient quantities of gold and silver to support the needs of developing countries. So, they invented a new reserve currency based on nuclear technology.

      I would argue that convincing the US that they don't need to start "spending" their reserves in your country has a very high monetary value to most nations.

  16. HellDeskJockey
    Holmes

    That's why I stay away from Cryptocurrency

    Too many crooks and too little regulation. The concept is fine but some of the people implementing it are not. I don't believe "Sure I steal from everybody else, but I would never steal from you."

    1. Anonymous Coward
      Anonymous Coward

      Re: That's why I stay away from Cryptocurrency

      If you hold your own keys securely, crypto is the safest store of wealth imaginable. If you can memorise a sequence of 20 odd words and never breathe a word to anyone about your wealth, it will be yours until the end of time.

      1. Mike007

        Re: That's why I stay away from Cryptocurrency

        Wikipedia: Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions.

        Do you want to chose a different word to cover the time period after the hype has died down?

        1. Anonymous Coward
          Anonymous Coward

          Re: That's why I stay away from Cryptocurrency

          I'd tell you about the hundreds I bought for 7 pounds each earlier this decade, but that would be violating my rule about telling anyone. Enough have been sold that I never have to, or plan to, work again.

  17. PhilipT

    Blockchain?

    Isn't this EXACTLY that the blockchain was supposed to protect against? Or did I misread the hype?

    1. tfb Silver badge
      Pirate

      Re: Blockchain?

      You read the hype correctly. But it was hype, mostly, and the bits that weren't were lies.

      1. Tom 64
        Facepalm

        Re: Blockchain?

        The fraud here was the padding of his books with USD to swap for the crypto... Did you guys even read the article?

  18. tfb Silver badge
    Alien

    Widow

    So I guess the movements and financial affairs of his, er, widow, Jennifer Robertson, would be really, really interesting at this point.

  19. Cardinal

    Fear not!

    Don't worry, Ernst & Young will dig up all the dirt on Cotten.

    Oh wait! - You said he was cremated?

  20. IGotOut Silver badge

    Just to think...

    There are likely thousands more of these cryptocurrencies, being run by equally dodgy characters, with equally dodgy people buying into them.

    Then there are just idiots.

  21. Anonymous Coward
    Anonymous Coward

    Globe & Mail sent reporters to India to check up

    They talked to the coroner and others: https://www.theglobeandmail.com/world/article-how-did-gerald-cotten-die-a-quadriga-mystery-from-india-to-canada/ but behind a paywall.

    1. Anonymous Coward
      Anonymous Coward

      Re: Globe & Mail sent reporters to India to check up

      That page is no longer available - and the mystery deepens.

  22. JaitcH
    Unhappy

    What Is The Difference Between Gerald Cotten and a Regular Bricks & Mortar Bank?

    The answer is NOTHING.

    (Think Deutsche Bank or HSBC)

  23. DaemonProcess

    6 months too soon

    Its quite ironic that Bitcoin has quadrupled in value since he died.

  24. herman Silver badge

    If sympathy's the answer, I'll have temporary cancer.

    I doubt this bloke will get much sympathy, real Chrohn's or no.

  25. Claverhouse Silver badge

    ...Steals But Trash

    Everyone, including the victims, shall agree that any monetary losses are trivial, and barely register, compared to the damage this sort of thing does to the pristine integrity that is the defining quality we attribute to cryptocurrency and it's priesthood of bankers.

  26. maddoxx

    Did he really exist?

    Was he a "natural person"?

    Or was he a complete fake and we are looking all into the wrong direction?

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