The official story is that he died in India on December 9, and no one can access the BitCoin stored on the service because only he had the passwords to the service.
Weird, but here is where it gets weirder: Like many BitCoin wallets out there, but much of the deposits is kept offline in something called a “Cold Wallet”, the theory being that if it is offline, no one can hack into it.
The thing is that this means that you have to regularly transfer from a cold to a hot wallet when your customers need it.
A meat-space analogy would be the difference between the teller’s tray and the bank vault.
It appears that the money was never moved, which strongly implies that something hinky was going on with the accounts.
The only two logical conclusions to be reached are either that Mr. Cotton is on the lamb spending his ill-gotten gains, or with exposure of his fraud imminent, he took his own life.
Presented for your consideration:
When Quadriga Fintech Solutions Corp. founder Gerald Cotten died, account holders feared the encrypted access keys needed to recover C$190 million ($143 million) of cryptocurrencies held by the exchange in offline storage could be lost forever.
It looks now like the storage Quadriga is known to have used — dubbed cold wallets — has been empty since April.
Ernst & Young identified six cold wallet addresses used by Quadriga to store Bitcoin in the past. Five of those wallets haven’t had any balances since April 2018, and a sixth “appears to have been used to receive Bitcoin from another cryptocurrency exchange account and subsequently transfer Bitcoin to the Quadriga hot wallet” on Dec. 3. The only activity since was an inadvertent transfer of Bitcoin into that sixth wallet last month, which was disclosed earlier.
Crypto investors and exchanges often keep their holdings in cold wallets — typically, physical devices disconnected from the web that can be plugged into a computer when needed since internet-connected hot wallets can be vulnerable to hackers.
A preliminary review of transactions of the six wallets using public blockchain records showed that from April 2014 to approximately April 2018, aggregate Bitcoin month end balances in the identified cold wallets ranged from zero to a peak of 2,776 Bitcoin. The average aggregate month end balance over the four-year period was approximately 124 Bitcoin. Some Bitcoin in the wallets appear to have been transferred to accounts at other crypto exchanges.
Another 14 user accounts created outside the normal process were also identified, with deposits artificially created and used for trading. The monitor has reached out to 14 exchanges and received responses so far from four. It didn’t name the exchanges.
It sounds to me like Cotten used BitCoin to play the horses, or, even more disastrously, play the BitCoin markets.