Brian Armstrong Shares His Thoughts on The QuadrigaCX Situation
According to various explanatory tweets, Coinbase’s CEO, Brian Armstrong, does not believe that the Canadian exchange QuadrigaCX used the death of CEO Gerald Cotte to do a so-called exit scam or mismanagement.
QuadrigaCX has recently claimed that its CEO passed away with sole control over its cold wallets which contain more than $150 million in various cryptocurrencies, Bitcoin and Ethereum included.
The CEO declared that Coinbase has made its own investigation on the matter and concluded that QuadrigaCX had indeed funds in cold storage which were being controlled manually. However, they were moved in early 2018.
Armstrong was adamant to point that QuadrigaCX was one of the oldest crypto exchanges in the business. He then stated that if they “planned an exit scam, it likely would have been timed better.”
In one tweet, Armostrong notet that his tweets should be taken as “pure speculation,” and that “4. Patterns of sends from cold storage suggest they tried keeping exchange afloat, and maybe attempted to trade their way out of a hole; (again just a guess here)”
Armstrong goes further at pointing at a possible mismanagement situation rather than an attempt to cover the truth. “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink,” the CEO tweeted once more.
“6. Sequence of events suggests this was a mismanagement with later attempt to cover for it,” Armstrong explains in another tweet.
This whole situation is also analyzed by various researchers. For example, Taylor Monahan, a researcher at MyCrypto, has found various suspicious transactions from QuadrigaCX to other big exchanges such as Poloniex, Bitfinex, and ShapeShift. This, of course, points to a possible liquidation.
Monahan urged for caution in regards to jumping to conclusions, and Armstrong noted that as “the case unfolds we might find out we were incorrect.”
As mentioned before QuadrigaCX claims that $150 million in cryptocurrencies stored in cold wallets are currently locked out after CEO Cotton passed away. Jennifer Robertson, the CEO’s wife, has filed an affidavit where she reveals the CEO single-handedly managed the exchange’s transactions through his laptop.
The situation is still unclear, but the Supreme Court of Nova Scotia granted QuadrigaCX creditor protection. The counter appointed Canadian law firm Miller Thomson and Cox & Palmer to represent its customers in the imminent proceedings.