OPINIONATED: QuadrigaCX – An Exit Scam or Just a Crypto Tragedy

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4.7 • 698 Ratings

🗓️ 19 May 2021

⏱️ 38 minutes

🔗️ Recording | iTunes | RSS

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Summary

This week, “Opinionated” co-hosts Ben Schiller, Anna Baydakova and Danny Nelson are talking to Aaron Lammer, author of a podcast series about the now-defunct Canadian crypto exchange QuadrigaCX. This episode is sponsored by Nexo.io. The QuadrigaCX saga, first broken by our colleague Nik De and still not finished, could be a dark detective novel: Gerald Cotten, a CEO of a cryptocurrency exchange QuadrigaCX, reportedly dies in India, the crypto wallets are empty and his widow inherits a mind-blowing fortune, while users are trying to get their money back in court for years (the case is still ongoing). Aaron Lammer, an experienced crypto podcaster, took on a tricky task to tell the QuadrigaCX story to people who might not know about crypto but definitely can learn a thing or two from this thriller story. Aaron told us how he was investigating the QuadrigaCX story and trying to explain the basics of crypto to a non-crypto audience. The first episodes of his show, “Exit Scam,” are now available for listening. Aaron interviews a very diverse group of people who have insight into what could have happened at QuadrigaCX, from a private detective specializing in fake deaths to Michael Perklin, chief information security officer at ShapeShift, who knew Gerald Cotten personally. He walks us through what we know and don’t know about QuadrigaCX and its founders, and how the centuries-old history of scams and financial fraud got a new life in crypto. Enjoy the conversation, as we did, and definitely check out the podcast, an arresting detective story with elements of Crypto 101 course for everyone. Aaron’s Twitter handle is: @aaronlammer. - Nexo.io lets you borrow against your crypto at 5.9% APR, earn up to 12% on your idle assets, and exchange instantly between 75+ market pairs with the tap of a button. Get started at nexo.io. - Join thousands of newsmakers and influencers talking the future of money at Consensus 2021, a live virtual experience from CoinDesk. (Use discount code "BREAKDOWN" to save $25!) - Image credit: Ismagilov/iStock/Getty Images Plus See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Transcript

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0:00.0	Because I knew so little about him and because I had no idea what really happened, I decided to start by trying to figure out, was this the kind of person who could pull something like this off?
0:15.0	But when I started looking into Gerald Cotton, this facade that he had built up as sort of an idealistic bitcoiner pretty
0:22.6	quickly fell apart. And we realized that he was involved in things before Quadriga
0:28.6	that might have given him some of the skills to do this stuff. And I'll spoiler episode
0:34.1	three a little bit here. He was involved in Ponzi schemes when he was a teenager that called high yield investment
0:41.4	programs technically.
0:43.4	He ran these starting at about 15 years old.
0:46.7	And the end of one of these schemes looks a lot like the end of Quadriga.
0:50.9	Knowing that he had been involved in this stuff really changed my opinion about
0:57.0	what he was capable of. He had been doing these dress rehearsals before. A lot of the things
1:02.8	that were going on at Quadriga weren't high tech. As I said, someone who was sufficiently
1:08.1	motivated could have discovered them on the blockchain, but they used techniques that go back hundreds of years in terms of it's really easy to collect money from people,
1:18.6	pay out high returns, and obscure the fact that you're actually paying new investors with money from old investors.
1:29.2	And I think when you have something like crypto, it attracts the same kind of people that were
1:34.6	attracted to early stock markets and early investment platforms.
1:39.4	It makes it easy to hide as a wolf among the sheep.
1:47.2	Welcome to Opinionated with Ben Schiller.
1:50.7	Ben is a features editor at Coin Desk.
1:58.2	He's a seasoned business journalist, and he'll be talking with some of the most fascinating contributors to Coin Desk daily opinion section.
2:04.1	Ben is joined by two CoinDest reporters. co-host Anna Batakova and Danny Nelson.
2:09.6	This episode is sponsored by Interpop and the Sun Exchange.
2:15.9	And just a reminder, CoinDesk is a news source and does not provide investment advice.
	...

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