Spent on what? That money went somewhere. Aren’t there any assets of any kind to seize?
Not really. His wife has a lot of stuff - houses, a yacht, etc. - but it’s all in her name, because, by the most remarkable stroke of luck, Cotten willed it all to her a week before his trip to India. To get all that stuff, which apparently she’s already trasnferring around to keep away from trustees, you have to have probable cause to go after her.
I think Cleophus and Northern Piper are right; it quite likely QuadrigaCX was largely a Ponzi scheme, and that the difficulty in cash flaw caused by Canada’s FINTRAC regulations started a Jerry-Lundegaard-like cascade of problems keeping the caper going. The thing is, in the end, Cotten (or his partner, or wife, or a combination of them) don’t have to make off with $190 million to make a pretty slick and profitable. They just have to make off with the last millions, as well as all the money and assets they made from salaries.
Look, nobody really believes Cotten had the only password, right? Wouldn’t literally every other person in a position in authority in the company, plus his wife, be on him 24/7 about that? It’s fucking insane. If my wife had the only password to our accounts and records and there was no way to retrieve it if she died, it would be the only thing on my mind. I wouldn’t want her so much as getting out of bed for fear of losing everything, and we have 1/200th the assets of Quadriga (or, 1/200th the assets they were supposed to have.)
Since we can assume with a high degree of confidence that that is ridiculous bullshit, we must conclude there is SOME kind of conspiracy afoot, one that either started with a Ponzi scheme (very likely) involves stealing money as an exit plan (pretty likely) or both (most likely.) Which might involve Cotten faking his own death. Hell, it might involve poor Gerald Cotten being murdered.
What lengths do you think people will go to for that kinda scratch? All the lengths.
People are trying to figure that out. The thing about crypto is that all the transactions are public record. I suspect crypto holdings were squandered away on speculative gambling and currency deposits spent on either more speculation or various cash outlays. QuadrigaCX started operations in 2014. On average, bitcoin’s price rose and reached its all-time high in December 2017, before crashing spectacularly. It pushed along and crashed further around November 2018. To borrow a term from the finance world, lots of people got caught up in the irrational exuberance and I believe the QuadrigaCX principals expected they’d be able to make up what they siphoned off later. There is likely nothing left to seize of any real value compared to the amounts outstanding.
Also, here’s another article, containing investigation by the Globe and Mail that further supports Gerald Cotten having actually died. Everyone involved in QuadrigaCX, from Cotten et al. to crypto “investors”, were involved in the scam that is cryptocurrency one way or another, but expected someone else to end up holding the last bag. It’s not this romantic scheme of pulling off a great heist and disappearing without a trace.
The latter potentially including the ever-popular “hookers and blow,” of course. 
One of the things about the crypto world is that it is heavily soaked in anarcho-libertarian ideology. “Be your own bank” is a mantra among crypto users that emphasizes not relying on others for security. Keeping a valuable crypto wallet secure requires an incredible level of paranoia and technical effort, and a lot of that effort is based on keeping the cold storage device absolutely isolated from the Internet. Cotten didn’t get married until very recently, so I have no trouble at all believing Cotten expected to maintain sole control over the cold storage wallets until at least then. It’s absolutely a poor practice, and there are more sophisticated ways (also expensive and complex) to manage crypto holdings, but QuadrigaCX was a small project that blew up so it’s not at all unbelievable to me that one ad-hoc practice stacked up on another until something really unfixable happened. However, it’s equally plausible that Cotten’s wife never expected the court-appointed experts to decrypt the laptop and access the crypto wallets stored on it and hoped to maintain the cover story, all the while knowing nothing of note was left.
…
Sounds like there might be a few laptops…
I heard what you did there, Czarcasm, even if no-one else did. 
What regulators? I’ve not seen anything in any articles which suggests any regulation in Canada of businesses which take deposits of crypto-currency.
Quadringa kept running afoul of money laundering regulations. The issue wasn’t the cryptocurrency side of the transactions but the real money side.
That’s true. I was thinking making more of regulators specifically aimed this sort of activity.
Normally any business which takes in large amounts of money from consumers, for financial services, are heavily regulated: banks, insurance companies, trust companies, securities brokers, etc.
There doesn’t seem to be anything that applies to business that take in deposits of crypto-currencies. One of the articles stated that the BC Securities commission declined jurisdiction, because they didn’t have authority to regulate crypto deposit-takers.
The Securities Commission was correct; they do not have authority, and do not want the authority, to regulate video-game play money.
If there was anything else going on like money laundering, identity theft, securities fraud, Ponzi scheming, or tax fraud then the authorities will proceed on that basis.
In the least-surprising-ever update to this story,
Investigators Say Late Owner of QuadrigaCX Crypto Exchange Siphoned Client Holdings
One wonders who the “clients” were/are and whether the money they lost was real money, in the sense that they had taken it from the analogue world, or just the fictional profit from the appreciation of the digital currency?
Awww, you beat me to it. Have my 2nd favourite “surprised” reaction.
It wasn’t lost, he spent it. Regardless of whether it was appreciation, it was real money that belonged to somebody else who will never get it back. The concept of a “paper loss” is a rationalization by people who lose money.
The Widow Cotten is signing over almost all her assets to the trustee in bankruptcy, about CAN$12 million, keeping about $160,000.
So she had $12 million in assets despite the fact her and her husband never claimed any income from the company, and somehow she isn’t in prison.
Ol’ Mr. Cotten sure did die at a convenient time and manner.
Two points:
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Commercial fraud cases notoriously take a long time to investigate. Add in the technical difficulties here, and I think it will take quite a while before there are any decisions on charges.
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Charges would depend on her level of knowledge and involvement. If Mr Cotten kept everything close to his (electronic) vest and just showered her with wealth, that’s not criminal on her part. Would be different if the police can show active involvement and knowledge on her part about what was going on. (See 1, above.)
So, stay tuned.