Is Quadriga's Gerald Cotten Still Alive? The 'Exit Scam' Podcast Aims to Answer - Ep.248

Transcript

Hi everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin, a journalist with over two decades of experience. I started covering crypto six years ago, and as the senior editor of Forbes, was the first mainstream media reporter to cover cryptocurrency full-time. This is the June 22nd episode of Unchained. Conjure brings any asset you want onto Ethereum by allowing for users to create synthetic assets which track other markets. With zero interest loans and unlimited assets, it's helping DeFi to consume TradFi. That's c o n j u r e dot finance. Check it out.

The Crypto.com app lets you buy, earn, and spend crypto all in one place. Earn up to 8.5% interest on your Bitcoin and 14% interest on your stablecoins, paid weekly. Download the Crypto.com app and get $25 with the code Laura. The link is in the description. Tezos is smart money that's redefining what it means to hold and exchange value in a digitally connected world. Discover how people are reimagining the world around you on Tezos. Today's guest is Aaron Lammer, the host and producer of the podcast series Exit Scam, which is all about QuadrigaCX.

Welcome Aaron. Hi. Glad to be here. I'm a listener. Thanks for listening. So, Exit Scam has been this pretty amazing podcast series that you've put out. Why don't you give us a short synopsis of what it's all about? Well, I think people who are religious listeners to the show will have heard about Quadriga before. I think you you're piece with Taylor Monahan has to have been one of the first big podcast things about Quadriga. Um so, for a little recap, Quadriga was a Canadian Bitcoin exchange. It was the largest Bitcoin exchange in Canada.

Um and it collapsed um in early 2019 um after the founder, Gerald Cotton, uh died in India. And his death was somewhat mysterious to begin with and uh got even more mysterious um when it was revealed that he had not left behind the passwords to unlock Quadriga's cold storage wallets. And then it got even more mysterious um when some blockchain forensics by people like Taylor Monahan actually uh revealed that not only were these cold storage wallets locked, uh they were empty and had been so uh for some time. So, what we really did with the show was trying to solve two mysteries.

Uh what really happened to Gerald Cotton, the founder, and what happened to all of that money that was missing. So, before we dive into all the various rabbit holes that you went down to try to solve these questions, why don't you tell us a little bit about your background? How did you know, what were you doing before? How did you come to do this podcast series, et cetera? So, um I'm one of the founders of longform.org, uh which is a journalism aggregator uh for old people who were on the internet 10 years ago. You may remember when it was difficult to find reading material on your phone. Um so, we were kind of trying to fill that niche and through longform ended up starting to do the

longform podcast, um which is how I got into podcasting. And which by the way is one of my favorite podcasts for listeners um if any of you are media you should definitely check it out. But anyway. Yeah. Yeah, for the um four people who listen to the show who don't hate journalism, uh it's a great resource. Um and through that I got really into podcasting. And I always like doing podcasts about my own interests. Like I'm not like the kind of person who can just get assigned something. I kind of have to be into it myself. And I got really into crypto uh in about I guess in 2017 uh I started getting into crypto. And part of my way of getting into things is to

shill them to other people. And I started shilling crypto to uh my friend Jay Kang, who I knew was kind of vulnerable to it cuz he's a poker player and kind of a gambler, and that's always a good person to shill shill crypto to. Um so, I got him really into it and we did this show called Coin Talk um which I guess ran for about a year, a year and a half, basically until Jay had to start writing his book. Um and And that show was about crypto, but um not the most serious show about crypto.

I would say we kind of went into it knowing not very much, got a lot of things wrong, um tried to learn as we go. We kind of tried to take an experiential approach to crypto. So, like we were doing things like I had a market on Augur when Augur was first out about whether Donald Trump pee tapes would be would come out. We were just kind of like doing all sorts of fun things you could do. And pretty much the most the thing that grabbed me the most over and over in crypto were the the charlatans, uh the scammers, um the people who did really outlandish uh wild west stuff in crypto. And I know that a lot of crypto kind of wants to

sweep those people under the rug and say they don't exist or there are a few bad apples that don't represent the whole space. For me, that's the stuff that's stuff really kind of interests me. Like I don't know if I'm an amoral person or what, but I have always been fascinated by that stuff. And basically when Quadriga happened, we were still doing the show, I was like, there's just never going to be a story that tops this. Like as a connoisseur of the crypto scam, this one is just on on the Mount Rushmore of crypto scams. Not because of its scale, you know, there's been bigger exit scams. Even I think Mt.

Gox was was bigger. But simply the audacity of the whole thing and how many different competing mysteries there were all kind of circling around this one person who honestly people didn't know that much about. You know, a lot of these founders a lot of these founders have been on your show. You know, they're people who are out and about and kind of promoting themselves. Gerald Cotton wasn't really like that. He was kind of an enigma. Um he he it when we started looking into him, there was only a couple of pieces of audio of him talking, a few videos on YouTube. He was really like a a kind of ghost as a figure, which which made it

difficult to figure out much about what really happened to him. So, tell us a little bit more about him, a kind of you know, what his life was like and also what his lifestyle was like before he died. So, he was living the high life. He was a big international traveler, private jets all around the world. Um There's some insinuations that on a lot of those private jets he was carrying large amounts of cash and that his trips may not have been purely tourism, but involved moving money around the world and I have some theories about that.

And And when you say that, who are your sources? Um the source uh is one of the guys who was um part of the the flight center uh where he would fly he he was into flying private planes. And people who saw him, including this guy in private airports, said, "Yeah, you he would often have a duffel bag full of money." I mean, I I have a photograph of $1 million of cash on his counter. And I can tell you definitively where that cash came from and how it came to be on his counter. He he had these deals with uh ATM operators in which he would trade them Bitcoin for cash and they would show up to his house or to a

private airport with a large sum of cash. The stuff I'm describing isn't even contentious. This is in the Ontario Securities Commission's report. In fact, that photograph is in the Ontario Security Commission's report. Uh but going back further, and I think this was something I was actually really kind of excited to talk about on this show, um Gerald had roots in the pre-Bitcoin digital currency world. Um that another thing that crypto people like to sweep under the rug, but is a fascinating history of these centralized pre-Bitcoin digital currencies. Uh Liberty Reserve is probably the most famous one. Uh e-gold before that.

And the way that Gerald got involved in those was he was running Ponzi schemes as a teenager. And you couldn't buy into those Ponzi schemes with PayPal. You needed to use these digital currencies to buy in. And at some point he jumped from scamming people using these digital currencies to being an exchanger himself. He started an exchange called Midas Gold uh that was run by his future Quadriga co-founder, Michael Patryn, at that point I believe using a different name. Um and they ran a Liberty Reserve exchange. And you can see these interviews with uh Gerald Cotton where he says, "I have 10 years experience in the digital currency space."

And this is when Bitcoin is only five or six years old. So, if you were reading behind between the lines and you knew enough about the real history of this stuff, you would know that he was involved in it uh before Bitcoin, which gave him this interesting leg up on anyone who wanted to start an exchange. There was all of these, you know, guys at Bitcoin meetups who could talk a big game, but they hadn't really done what it takes to run an exchange, which is a very bizarre specific skill set. So, um he started off in that world and successfully transitioned into Bitcoin exchanging, but the stuff he was exposed to in those days is some pretty dark criminal stuff.

That's kind of what was going on on Liberty Reserve. A lot of money laundering, cartels were involved, and a lot of scamming, I would say. Scamming is the dominant theme in all of this history. And when you say that, how do you know it's it's a scam? It's what? Like what what was he doing exactly? So, he was involved in these things called high-yield investment programs. There was a very popular forum called TalkGold that they were operated on. And that's where he met most of his friends.

That's where he met the future founder of Quadriga. You can actually go back on this forum in Wayback Machine and see them interacting with each other when Gerald is 15 years old and his co-founder Mike is 20, 19 or 20. And so, he was operating these high-yield investment programs which accepted Eagle to buy in. And the way that these high-yield investment programs operated, it may be familiar to some people who are kind of gambling on algorithmic stablecoins at this point.

Basically, people would buy in and would be would get the first people would get paid out fairly outrageous returns, and then the thing would collapse and the person operating it anonymously would disappear. And this is something Gerry did many, many times as a teenager. And we know that people who knew him were kind of weirded out. They said, "Where is he getting all this money?" Well, now we know where he was getting that money. He was running these high-yield investment programs, which I would just refer to as Ponzi schemes.

They're very low-level internet Ponzi schemes in which, I would argue, much like algorithmic stablecoins, a lot of the people who are buying in are kind of aware that they're involved in something sketchy that's probably eventually going to collapse. And the gambling part is whether you get out before the whole thing collapses. And Gerry at some point jumped from running those schemes to realizing you could probably make more money selling the the digital currency that that was going into these schemes and got into exchanging. a really interesting period. In some of my research, there are forum posts by Satoshi

Nakamoto in which he talks about Liberty Reserve and proposes a Liberty Reserve Bitcoin trading pair. This is before there would have been any fiat on-ramps into Bitcoin. Liberty Reserve was considered kind of as like, maybe we can use it as our our tether, basically, as we're getting Bitcoin off the ground. Now, I have no indication that there actually ever was Bitcoin Liberty Reserve trading. Liberty Reserve was shut down in 2013, so it kind of it actually ended up being kind of the last gasp of centralized digital currencies before Bitcoin came onto the scene.

Okay, so here we have this larger-than-life character with this sketchy background, although all this comes out later. This was not known at the time. Um, tell us a little bit about kind of Quadriga's story and status at the time of his supposed death. So, Quadriga had become the biggest Bitcoin exchange in Canada kind of by accident. Um, I think CA Virtex was previously the biggest exchange in Canada, and CA Virtex shut down, and there's kind of different stories about exactly why CA Virtex shut down. It was hacked, they lost money, and then I believe it was also absorbed into Kraken in some way.

Is that right? Do you do you remember that history at all? I I did read that when I was doing research for this show, but yeah, I don't know the details. So, Quadriga shot up and became the number one Bitcoin exchange in Canada. And when you talk to a lot of people about why they trusted Quadriga, they'll cite that it was the biggest Bitcoin exchange in Canada. There's a lot of circular logic like this in crypto. And another reason people will cite why they trusted it is that it was run by a Canadian guy, and people in Canada liked trusting their money to a fellow Canadian.

So Gerry Gerald had all of these things working for him, you know, in in that way, but beyond that, there was really very little known about Quadriga. Um, we know now that it was based on white-label software called WLX WLX that was originally developed by CryptoCapital, which is another scandal. Right. For for listeners who may not recall, that was the company that Tether made the loan to and didn't get its money back.

I forget the amount, but it was a huge amount, 860 million or something. Or no, I don't remember. Or maybe that's what they had after. Anyway, okay, so I don't know the amount, but they had a huge amount that got tied up with CryptoCapital, and that's how Tether's reserves, um, yeah, ended up being less than what they should have been. We couldn't even get into this in the show because we had so much we needed to get into about Gerald Cotton, but there's a whole 'nother story about the payment processors that Quadriga was using, many of whom froze money and had large sums of Quadriga's money at the time it shut down, and CryptoCapital is definitely part of that story.

But also, they made this white-label exchange software. So, in retrospect, it looks kind of like a very small team of people used white-label software to put up an exchange that people perceived to be a legit, you know, big-time exchange, but once you sort of peeled back that layer of reality, you pretty much realized it was just Gerald Cotton pretty much running it by himself with a couple, maybe like a team of like two or three people who were really involved. And then he had hired some like customer service reps, but these were people who had never met him, who were just, you know, responding to support tickets, basically. In terms of

like power and access to the money, it was pretty much just Gerald Cotton. And so, earlier you talked about how one of the mysteries is what happened to the money. So, once he died, kind of fill us in from that moment until the discovery that, you know, most of the money was gone. So, the the missing sum, or the sum that customers had on the exchange at the time it shut down, was about $215 million Canadian.

And that was a combination of Bitcoin, ether, Canadian dollars, which they called quad bucks in the Quadriga system, and maybe a little bit of some other altcoins that were traded, but it was primarily those three things. And you know, in terms of the quad bucks, it was very difficult to know where they were because there was no information about where Gerry had bank accounts even. So, that mystery was kind of all like, "Whoa, we don't know anything here." But in terms of the Bitcoin and Ethereum, they should have been in a wallet somewhere that someone could pretty easily find.

And it turned out that people who ran other exchanges or wallets kind of have a good insight into that, right? Because they had interacted with Quadriga wallets. And so, they were able to pretty quickly discern what might be Quadriga's cold storage wallets. And by hopping from wallet to wallet, people were able to sort of map out um some of the major Quadriga wallets, and very early, like honestly, if you look on Reddit, it does not take people very long. Now, those people didn't know for sure, but people had these suspicion very early that there was no money in these wallets. And in fact, that those wallets had been emptied out more than 6 months before Gerald Cotton took this

honeymoon trip to India that he died on. So, immediately, there was another mystery, which was why had these wallets been cleaned out 6 months earlier, and and where was that money now? And, you know, depending on how much we want to spoiler it, I can get into a little bit more where that money ended up. But early on, it was just kind of, "Well, it's not here. It's not anywhere we can see." Yeah. Well, so my feeling about this is that probably most of my audience knows this story, so I do feel that for anybody who has not listened to Exit Scam, that you should

stop the recording stop the pause. Pause and keep your location, and then come back to listen to all the episodes, which by the time this comes out, the Oh, yeah, they will all be out, right? Yeah. Mhm. Yep. They'll all be out on Audacy, which is a new app that I guess Exit Scam has partnered with, and it's called Audacy. I think on all the other platforms, it's just a week behind. Yeah, so the the last episode comes out on Monday on Audacy, and then a week from Monday. If you start binging now, you're going to be timed perfectly to just go right into the ending.

Yes. So, then you can come back and listen to the rest of the show, but I do actually want to get into those details because I do feel like probably most of my audience has been following this for a while. I mean, one thing that I will have to say when you talk about how quick on Reddit people jump to notice that the cold storage wallets seem to have been emptied. I remember that that day one of my sources texted me about this and I really think I should look back at what the message actually says. But within like a very brief period, like an hour or something, you know, he was just like I you know, I something there's something fishy here.

And yeah, I'll have to look at exactly what that says, but it's just fascinating how right away everybody kind of picked up that there was something wrong. And it so what were the other like hints at that time that this may not just be a normal person who randomly died, you know, by accident. Well, this was an interesting thing when I started talking to people. People at first were like oh, this came out of left field. We had no idea. Then I started talking to some people who were a little bit better plugged in in crypto. And people said well, actually people had been warning me for several months that I ought to get my coins off of Quadriga. So, this was not a total secret that

something was wrong at Quadriga and in fact, if you go back through the Reddit history, you can see people saying I can't withdraw from Quadriga. I put in the withdrawal request 2 months ago. It hasn't been paid out. I'm getting no response. Wow. And and this is difficult to parse cuz you know, I want to be fair. You can find similar complaints at the Coinbase sub Reddit and Coinbase wasn't on the verge of collapse. But looking backwards, you start to see a pattern where basically they stopped paying out withdrawals. They're still taking in money, but they're not putting out any money. And this pattern actually extended for the month after Gerald Cotton died. So, after he died, Quadriga waited a month to announce his death.

During this month, people were still putting crypto were still putting dollars basically into the system. But anyone who tried to withdraw their money wouldn't be able to. So, you had people putting on money to buy Bitcoin, trying to immediately withdraw Bitcoin and having it frozen on the exchange. So, I I put a a kind of an asterisk when people are like, yeah, well, dumb asses like leaving their money on exchange, like they got what they deserved. Some of these people had no intention to leave their money on the exchange. They they simply didn't realize that they were putting money into a a slot machine that had already had the power plug pulled from it. And that's even true before Gerald Cotton

died. People who thought that they could be on the exchange just to make a trade were unable to get the money off. So, finally they announced that he is dead. And then people kind of rewind through the last year and see a lot of red flags. A lot of indication that Quadriga didn't have the money to pay out its withdrawals. And that some of Gerald Cotton's actions kind of look like a person who was maybe at the end of some kind of a scheme. He had told his head of customer service that he was he wanted to retire and give the business over to him.

Um, there's just various indications that he didn't see himself being the the person running this exchange for the long run, which is generally a a big red flag with an exchange. You don't want to be at an exchange that the person running it is planning to take off sometime soon. Yeah, well, especially now I think I think people will be on the lookout for that. So, we briefly did cover his co-founder, Michael Patryn, but why don't you just explain what happened to the relationship to so it's clear why at this point it was really just about Gerry. So, Michael Patryn and Gerry started Quadriga together. Michael Patryn's a little older than Gerry and

um, I think he kind of represented himself as the veteran businessman and Gerry is the the young wonder kid kind of. They actually intended at one point to take Quadriga public. They were going to do it's not actually an IPO. It's sort of a reverse takeover where they would get a shell and um, anyway, in retrospect that seems totally nuts. I mean, I think their I think their revenue at the time was like $22,000 a quarter or something like that. And the the plan for whatever reason failed and they had a big fight after this.

From what I understand, the fight may have been about Gerry sort of sabotaging the the going public idea. But there's some dissent about that about exactly what they were fighting about, but both of them agreed that they had a big fight and that Mike quit the company and left. And the whole board actually took off, too. Mike had kind of installed his own board there. So, from that point forward for the last two or three years of Quadriga, it was basically just Gerry. And that was kind of the last point there was anyone else looking at what was going on. And from that point forward, you pretty much see Gerry starting to leech money and and crypto off of the exchange um, either into his own pocket or onto other

exchanges where he started getting involved in, you know, margin trading coins and stuff like that. And tell us about the Chris Markay account. So, one of the big mysteries had been sort of how Gerry managed to get all this money off of the exchange without being detected. It turned out that he was creating these fake user accounts in the Quadriga system. Now, one of the great dangers about crypto is that you've got this real system, which is the blockchain that's immutable, that if you see a coin on the blockchain, you know it's real and you know it's someone really possesses it.

And then you have this Quadbucks system that only exists as only existed in the CMS of Quadriga. It's just a number, right? It doesn't literally represent a dollar in the bank account. Well, I I didn't realize that this whole thing would have so many uh, Tether-ish uh, undertones to it, but I'm not talking about Tether right now. I'm talking about Quadriga. So, in the case of Quadriga, $1 in the Quadriga CMS could have any relationship to $1 in a bank account. So, what Gerald started doing was crediting these fake user accounts with large numbers of Quadbucks.

I think Chris Markay was ultimately credited over $500 worth of Quadbucks. And then he would use these Quadbucks, which were backed by nothing and were totally fictional like Chris Markay, which was the name on these accounts, to buy up real cryptocurrency that was held by people on the exchange. And he didn't do this selectively. He did this industrially. He was the largest trader on Quadriga. By some estimates, he did over 30% of all of the overall trading. So, this actually had a dual benefit to him. Not only was he getting people's real crypto

with fake dollars, he was also boosting the volume of Quadriga. So, early on when Quadriga would claim that they had the most volume of any exchange in Canada, you have to remember that 30% of that volume is the founder trading against his own clients. And another thing people saw then was that there was often a premium on the price of Bitcoin on Quadriga. People would pay more for Bitcoin on Quadriga and this is something that people were lured into Quadriga. International customers would see this arb opportunity on Quadriga. So, why was the price of Bitcoin higher on Quadriga? Because

there was always a guy who always had money to buy your Bitcoin for more and more and his name was Chris Markay. Chris Markay was driving a localized kimchi premium. It was it was not as an extreme a spread as the kimchi premium. But you don't need a huge spread to to draw new clients in. If the if the spread is it's 1% higher on Quadriga, that's a great incentive if you're anywhere in the world and want to go sell Bitcoin. And in fact, um, the one of the biggest internet detectives on this case who who's anonymous, QC Act in, that's how he ended up having money on Quadriga. He's he's not Canadian. He's a trader who was

seeking out arbitrage opportunities and that was how he ended up having on Quadriga. So, ironically some of the biggest volume accounts on Quadriga weren't actually Canadians. They were people who wanted to take advantage of this guy who just loved buying everyone's crypto all the time. Oh, okay. That makes a lot of sense because when I was listening to the show, it's like he sounds Australian and I was He's Australian. Oh, okay. I probably should have explained that, but it was like a weird I was like, I don't want to dox you, but you're pretty obviously Australian if we use your voice but Well, you know, I mean, he could have immigrated to Canada or whatever, but anyway, okay. Totally. All right, so in a moment we're going to talk about

Gerald Cotton's death and I'm going to use air quotes here. This is or maybe it should be a question mark. Alleged death. But first a quick word from the sponsors who make this show possible. With over 10 million users, crypto.com is the easiest place to and sell over 90 cryptocurrencies. Download the Crypto.com app now and get $25 with the code Laura. If you're a hodler, Crypto.com Earn pays industry-leading interest rates on over 30 coins, including Bitcoin, at up to 8.5% interest and up to 14% interest on your stablecoins. When it's time to spend your crypto, nothing beats the Crypto.com Visa card, which pays you up to 8% back instantly and gives you 100%

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adaptability engineers conservationists entrepreneurs collectors, game developers, and artists from around the world are building, creating, and using Tezos every day. Discover how people are reimagining the world around you on Tezos. Back to my conversation with Aaron Lammer. So, tell us the circumstances surrounding Gerald Cotton's death. So, in the last few months of his life, he got married, signed a new will that left everything to his new wife, and they took a honeymoon trip to India. Um, it was actually a dual honeymoon trip, and they had donated money to have this orphanage built in an Indian village. Um, so the

trip was supposed to take them around India for for a period, and then they were supposed to go to the grand opening of this orphanage. But, before they got there, um, he landed in Jaipur, and he started having stomach pains. He had Crohn's disease and and was being treated for it. Um, they decided it was serious serious enough that he needed to go to the hospital, um, and he spent the night at the hospital and and died the next day. Um, and that was basically going in everything we knew about his death. Um, what is that it was this sort of sudden tragedy in India.

And so, tell us some of the other facts that came up that, you know, led people to question whether or not he actually died. I think the will was one of the first suspicious things, that it was filled out only 3 days before he took off, and that it meant that his wife, who he'd only been married to a few months, was going to inherit over $10 million worth of real estate in Canada. Um, that alone, I think, would have set off a fair amount of suspicion. But, the fact that those cold cold storage wallets were empty really ramped up the suspicion. And there was certainly the

question of whether someone could have faked their death in India. There is a real industry in India that helps Westerners fake their deaths. Now, most of those people are doing insurance fraud. It's for different ends than Jerry would have, but the apparatus was there, and realizing that Jerry had these dark web connections and had been involved in this kind of shady money laundering underworld stuff, um, at least for me, convinced me that if he had wanted to fake his death, he would have had the right tool set to do so. Um, that doesn't mean he did.

We didn't we didn't really early on have much else to go on. You know, if he did fake his death, no one had figured out where he went. Um, we knew that there was this large sum of money missing from Quadriga, and that was also a relevant piece of evidence was, well, if he is really is dead, then where is all this money? Where did all the money go? Right? Even if you accepted that he had died a natural death, you had to account for, um, you know, something like $80 million that was still unaccounted for.

So, all of those factors, I think, um, made people suspicious that that he was really dead. It seemed like too great a coincidence. Yeah, and there were a few other details where, um, I so I can't remember who this person was, but there was somebody in India who was asked to embalm the body, and she refused for some reason. Can you explain that? Yeah, I mean, what we know about what happened in India is really just from going and asking each person along the way who encountered Jerry's body. And the person who was first asked to embalm

his body, his body had been brought there by two employees of the hotel that he and his wife had been staying at. And she felt like this was a non-standard way that a body would come to her embalming, uh, center, her embalming call, I think it's actually a college. Um, and so she refused to embalm the body. And she gave, you know, you you can hear the explanation she gave for it. Um, and then it went to a different embalmer, and that embalmer gladly embalmed the body and sent it on.

Um, I don't think that this is definitive proof that something sketchy happened, um, but basically, you know, we wanted to know whether any of this stuff looked unusual, um, from the perspective of people in India who were actually there when it actually happened. And this is kind of the first wrinkle in that story where someone says, "No, actually it was kind of non-standard what happened. It did raise my suspicion at the time." I will say that a counterpoint is that the person who was the second person who did embalm who did successfully embalm him had a copy of his passport, um, you know, there when someone went and

checked and confirmed, "Yes, I embalmed him, and he was the guy. He looked like the person." So, it's confusing. Okay. Okay. Okay. Because there was something in the description where I was like, "Oh, it would be so useful if bodies were, you know, like blockchain-based tokens where you could check the provenance." Because there was something about kind of, yeah, the the chain of transfer where it did raise questions about whose body was actually being moved. Um, so one of the more intriguing episodes or interviews you did was with this person who investigates people who fake their own deaths, and I wondered, so what were some of the other things that he picked up on, um, that kind of

lent credence to the theory that Gerald Cotton could have faked his own death? Well, you know, one thing that people have said is when there's this much money at stake, you you want a body or you want DNA. And we looked very closely to try to, um, show that anyone had had confirmed that that this was the right body in the right coffin. We thought Originally, we thought, "Oh, like they would have checked it at the airport or when it was coming through customs." And we talked to to Canadian authorities who said, "Well, actually, if there's no suspicion of foul play or anything unusual, you know, if it's just a tourist coming

back, there's nothing in the law that says we're going to force you to open this coffin and take a fingerprint or a DNA test." So, we were able to find no proof that such a thing had actually happened. And for Rambam, uh, Stephen Rambam, who's the death-faking PI, you know, his tact is that you should just sort of be suspicious of everything, and that until someone has proven any of this stuff, it merits further investigation. And you know, certainly in his case, he's seen situations where people confirm the death, you know, whether it's local police or medical, um, staff, and this isn't just in India, this is all over

the world. Uh, this Philippines is a place this happens a lot. He talked about a case in Mongolia. So, you know, some of the things that are these basic checks that to me are like, "Oh, like his doctor, his doctor couldn't be lying." Well, you know, when you talk to a guy who's an expert in this stuff, he's he'll say, "No, no, his doctor could be lying." You know, that that he's actually dealt with a lot of cases, uh, where this stuff has come up. And you know, one of the things that was very relevant to him was Jerry's past as a scammer, and the fact that he had an organized life history of these kind of deceptions and that they follow a pattern.

Gets a bunch of people to give him money. Uh he makes excuses and then he disappeared. And this fit into that pattern. So it's a little bit like you know, if someone who is a suspect in a murder, you find out that 20 years ago they were accused of a similar murder. That's not in any way grounds to convict them, but it is kind of the point where you're like, yeah, we really would like that DNA confirmation, you know. Yeah, and some of the other things that fascinated me was he described how somebody who had the kind of like means and skills that Gerald Cotton had could have faked their own death and truly be

alive now. And he talked about how because Gerry knew how to fly his own planes and those wouldn't necessarily have to go through the nor- normal kind of like border control or customs or whatever it might be. Um or even his sailing capabilities, that all those things would enable him to kind of live out life on the rest of the without encountering the kind of authorities who might um pull him in for questioning. So can you is there anything more to add other than those details I mentioned?

I would say not to mention his deep experience with VPNs and Tor and uh cloaking his where he was online, uh an ability to move funds across bank accounts and crypto accounts. I mean, look, the hardest thing about faking your death from what I understand, and I'm not talking specifically about Gerry, this is just I learned a lot about people who successfully fake their death is you need a new identity set up somewhere else and it's got to be all waiting for you. If you're trying to set this up after you faked your death, you're in trouble. So you need a passport, you need a place to stay, you need a local bank account that is

already funded with money. And all this is the kind of stuff that Gerry was really experienced with it, you know, moving money across international borders. You're right, private airports are great for that. Did he stash money at casinos? We know that he frequented international casinos. One of the things I learned that is a a way to stash some money in another country is to go to the casino and deposit a lot of money and then get back a a claim ticket that you have money sitting at the casino. All of these techniques would be useful to someone who wanted to start a new life somewhere else that had no connection to his old life. Um certainly privacy coins

would be something I would think about in that situation and and we know that that Gerald was interested in privacy coins and was actually a big Zcash holder at one point. Um So again, these are all skills that rather than actual evidence that he is living a new life. But when you really think about it, there's not that many people who have all of these skills who could even try something like this. Um you know, he was an early Bitcoin holder during the Silk Road era. Well, one of the big things sold on on Silk Road and a lot of dark nets is fake passports, fake identification. Mhm. Um all these things would have been useful if he if he did decide that that he was going to do

something like this. I think the flip side of all this is that Quadriga was almost out of money. And so he was on the verge of being revealed. You know, at a certain point people weren't just going to post on Reddit about how they hadn't got their withdrawal. People were going to do something about it. So there was kind of a perfect storm of pressure coming down on him that he needed to do something. Um he needed to get out of the situation he was in. Um because you know, if you just look at the course of 2018, there's the big market crash. That pretty much wipes out almost all the money that he's been gambling uh on behalf of his customers and people start pulling their money off the off of

the exchange. So a bear market and a crash are very bad for someone running a fractional reserve Ponzi. As soon as more people are pulling out than are putting in, you're in trouble. As long as there's a bull market, you're kind of fine. You can just assume more people are going to want to buy than are going to want to withdraw. But uh as the the ocean started to pull back there, I think he would have found himself uh quite exposed. And and in fact, he actually funded money back into Quadriga in the last few months. So money he'd already embezzled out, he started funding back into the exchange simply so that it could pay out some of these withdrawals. Mhm. And where was that coming from? Was that That's uh I

believe also in the Ontario Securities Exchange report. So they basically have a sum of all of the money that he took off the exchange and then they show actually some money came back in, about $10 million over the last few months he was alive. And I know he was also really waiting for the CIBC to unfreeze They had about $26 million worth of the money frozen in bank accounts and he was eagerly awaiting that money getting unfrozen so he could use it to pay out withdrawals and it actually got unfrozen just before he died, like a couple days before he died.

Mhm. So if the private investigator who investigates people who have faked their death, uh what once he kind of looked at all the evidence, did he say what he really thought that you know, like where where would he put the odds that Gerry's alive or dead? You know, I mean, uh he he thought it was very suspicious. I believe all the the phrase he used is every red flag uh you can raise, he's managed to raise that red flag. Now, whether that means the red flag of he faked his death or the red flag of this merits investigation, I I I think that's ambiguous. I he never gave me like a

percentage chance that he was alive or dead. He looked at it more like, you know, as an insurance investigator, you either investigate or you don't investigate, you know, when someone files a claim. He's like, oh, this one, this is the one that you send the A-team on. This is the one you really really want to look into. Um and you know, when I interviewed him, it was actually only probably closer to a year after this happened. And now it's two and a half years, which you know, the longer it goes without something happening, that also could be seen as as some form of evidence, you know, the longer Gerry goes without getting caught, you know, I do think that there's a very

realistic chance that that he is really dead. Um and if that's true, um and this is kind of the conclusion of the show, so double spoiler alert if you're still listening, my view is that he was performing an exit scam either way. That we we basically factually know that he had taken a lot of money out of Quadriga and was planning to try to escape the consequences of doing so. Whether that was by faking his death or he happened to be in the middle of that and he suffered this bizarre, tragic, natural, accidental death. Um in both cases, I think his motivation was actually kind

of the same. Um I mean, it's almost like him dying in the middle of it is even greater coincidence or even more improbable. It's a bit like if Bernie Madoff had had a heart attack the night before they busted in his office and arrested him. Um again, I think people would have probably never accepted that that really happened. Uh just like people will probably never accept that Epstein uh died uh by suicide or you know, a lot of these other come on, this coincidence is too crazy kind of stories.

Yeah. Well, yeah, I mean, this gets really dark, but I did think, well, if he really did die, it could be because he obtained some substance that enabled him to get ill in such a way that it would look like he died of you know, the causes that the doctor said. That is something we like looked into. I mean, murder or poisoning by murder or suicide is something we considered. And I also considered the fact that someone who had just committed one of the biggest crimes in Canadian financial history has existing health problems and is $200 million in debt, it's not healthy. It could it could give you an ulcer um believing that people

were on your trail. So um Yeah, although um it was that it was something like his body had gone into sepsis, like he had he had some infection and that caused heart attacks. And then he died from that. Wasn't that the what happened? he died of cardiac arrest, but his death was consistent with complications from Crohn's disease. He had a perforation in in his intestine. Oh. And which later caused him to go into cardiac arrest. So from what I've heard from talking to doctors, his death was, at least as documented by his doctors, was consistent with a way a 30-year-old could die of Crohn's disease. It is unusual for a 30-year-old

to die of Crohn's disease, but it is possible. And you know, we actually have some information that he had had previous medical breakdowns that had required intervention. So he, you know, he would have been aware that that he had a a troublesome health situation. Well, okay. Yeah, it's just with the timing, you know, shortly after his will it Um so, you know, a lot of the customers of Quadriga did ask that the body be exhumed.

And it looks like that's not going to happen, which is surprising. So, can you talk a little bit about that situation? Yeah, so there's a group of creditors who are represented by lawyers and they have their lawyers basically send a letter to the RCMP requesting that they exhume Gerald's body and do DNA testing to prove that whatever is in his coffin is really him. Um and the crypto press picked up on this as if it was like a sure thing. They're like, "They're digging him up." Um which it it turns out was a little bit premature because the Royal Canadian Mounted Police have no obligation to listen to a letter of this kind. It has no real legal stature.

It's a like if I uh sent you a letter that said I I want you to have this guest on uh on on your podcast, you could consider it, but you don't have to do it. Um and in fact from what I understand the Royal Canadian Mounted Police are kind of loath to investigate this case any further in terms of him faking his death, period. Um they believe, from what I've been told, that he is really dead. They're satisfied. It's possible that they have information that I don't have that proves he he's dead. That that's a real possibility that that we've always sort of had out there is maybe the reason law enforcement doesn't want to dig him up or investigate this

further is they actually know something that we don't know. Um but from what I understand the chances of that body getting exhumed are very low. Um people have put it as below 1% to me. So, while it would help me finish my story, uh it doesn't look like it's happening. Yeah, I have to say, frankly, their decision does boggle the mind, at least in my opinion. But you're right, maybe they know something we don't know. Um but there's Yeah, we're we're we're just going to run through all the spoilers because one of the more intriguing episodes was the one you did on Jennifer Robertson, Gerald Cotton's wife {slash} widow.

And there were a couple of things after she returned back from India that I found really suspicious {slash} notable. Um but one of them was about how his desk had been cleaned up while they were in India. Can you talk about that? And I almost didn't even really know what what the show was kind of implying there. So, what was the significance of that? Well, I don't mean to imply anything specifically other than the facts. So, I'll I'll run through the facts, which are that after Gerry died in India, um before Jen returned to their house with the coffin, a group of people were in the house, Gerry's parents uh and I believe

his brother and his sister-in-law. And when Jen got back, everyone wanted to look for this password cuz at this point they were still believed that there was 215 million dollars in these cold storage wallets. So, they tore the house upside down. Like they they cut open furniture even, basically trying to find anywhere that Gerry might have uh left this password. And one of the biggest beliefs was that maybe it was in Gerry's safe because he had a safe in his house. And he had espoused the use of paper wallets repeatedly. He said, "The best way to keep your private keys is with paper wallets. I use paper wallets and I have the safe in my house where I keep my

valuables." Occam's razor was if these passwords are anywhere as paper wallets, they're probably in the safe. So, the safe was in his attic and it was bolted to the rafters. So, basically, when the first time anyone from the outside went came into the house, um these are are things they said. They said that Gerry's office, which had a reputation of being messy and full of papers, had been cleaned up. And it appeared that things had that had previously been inside it were gone.

And the safe, which had previously been bolted to the attic, was found on the floor of his home office and it was open. And it was empty. But wait, I I I don't understand because um doesn't that mean that the family could have gone through all those things and right? So. That's right, yes. But is that suspicious? I don't I I I don't feel like I'm connecting all the dots. Well, if there was a password written down, anyone who was in the house, um which is a small list of people, could have ended up with that password before investigators were on the scene.

Um I I offer that uh with with no um specific implication. Um but you know, when people say, so it was believed that Gerald had a personal cryptocurrency stash, which is referred to as his nest egg. We know that he was a pre-sale Ethereum buyer. Um he had a large amount of personal Ethereum. He was friendly with Vitalik, actually. You know, he was working out of Decentral Toronto at the same time as Ethereum was getting off the ground there.

So, my only implication in bringing up the home office and his safe was that while people were looking for this stuff, um they could have found private keys to wallets that contained cryptocurrency. And it's unclear if they did whether they would have disclosed that to anyone. This was before anyone was investigating. This was before anyone knew Gerald was dead. So, these are all things that happened in the period between when he died and when anyone from the public knew that he was dead. And if he did die, I think it does merit investigation what happened to this private cryptocurrency stash and where could have the private keys been

and who could have gotten them. And that nest egg has still never been found and I couldn't tell you how large it is, uh what's inside it or where it is. Um never been seen again. Hm, okay. Yeah, and one other piece I I didn't quite know what to do with was how apparently Jennifer and Gerald Cotton's family of origin are no longer on speaking terms. What was your read on that? It's difficult to read. I mean, you know, at the time that they stopped speaking together as far as I knew, Jen at that point stood to inherit millions

of dollars um from this will and his parents stood to get nothing from the will. So, that could have been a reason for conflict between the two of them. I don't know. I have I haven't been able to speak to them. I mean, Gerry's parents haven't said anything since he died. So, we have very, very little insight there. But I would say in a larger sense that even if you believe that Gerry really did die of natural causes, when you look at who was left behind, they had sort of competing objectives, right? You have Alex Haydn, who was Gerry's uh lead programmer. Um that's the most crypto knowledgeable person,

the person who had the best chance to know what was really going on at Quadriga. And then you've got his widow, Jen, who initially stood to inherit a lot of money and then it had all of that money seized. And you have the creditors, you have his parents, and each one of these people have slightly different objectives and a slightly different view of what should happen. Um and so, I kind of take everything that all of them say with a grain of salt um in terms of what were people's agenda and and more specifically, how much did they really know about what Gerry had been up to. You know, it's very easy to look negatively at his wife

and say, "Well, she didn't she didn't tell people for a month he was dead. That's that's shady. That's sketchy." But we ought to look and say, "Well, who who gave her that advice and what did she know at the time?" There's the possibility that she knew almost nothing about what Gerry was up to. She just thought she was married to a like successful crypto dude who was rich and was going to take care of her no matter what. So, in a lot of these things I I feel like you kind of have to take them at face value and say, "Well, we really don't know." It's a really big difference whether you read this as her true, you know, belief, which is that she didn't know anything, or you think she's hiding something. And we

tried to consider it, you know, in both ways. First, update us kind of on her financial situation because what Gerry put in his will is not exactly what happened. Um but then also, yeah, tell us a little bit about the different theories about, you know, whether she was in on it or or what and any other theories you have about her. So, after the fifth monitor's report came out from Ernst & Young, they pretty clearly showed that all of the stuff that Jen had inherited from Gerry had been purchased directly with embezzled funds. So, Gerry was taking this customer crypto and sending it to OTC brokers who were cashing him out, transferring him money that he was

directly using to buy houses, buy a plane, buy a boat. That's That's all the stuff Jen inherited. So, she voluntarily actually entered into a settlement with Quadriga's creditors in which she gave everything back. She was allowed to keep, I believe, $90,000 in her checking account, her 2015 Jeep Cherokee, and her wedding ring. And everything else went back to Quadriga's creditors. And actually, those houses have mostly, I think, been sold now. The uh Gerry and Jen's house was like on a Canadian real estate website if you ever want to take a uh virtual real estate tour of it. I think it's still up there. So, um

you know, she lost everything, you know? She was very, very briefly rich and then and then went back to having, um you know, the same life she had before she met Gerry, I guess, you could say. Um and as far as we know, she she's living in Halifax. She's back on social media. Um I believe she's started to date again. Um and it seems like she's moving on with her life, you know? It It doesn't It doesn't seem like she's still kind of in this realm.

Um And what you read from that, I think, you know, kind of depends on on what what you think happened. Um but I do think I think it's very possible that she is telling the truth and that she really didn't know what her husband was up to and and did get hit with a shocking secret, um that she dealt with as best she could, um which was that her husband was an epic fraud. One One of One of the biggest frauds there was out there. And I do think it's somewhat credible that she could have not known that, you know, particularly with something like crypto.

I think it's very easy to be like, "Yeah, I don't know what he's doing. We're rich. Like, let's not ask too many questions." And the ironic part in all of that is that Gerry could have been rich without stealing from people. He was into Bitcoin in 2014. He was an Ethereum pre-sale buyer. And he ran an exchange. Any one of those things is plenty to make you rich. With Gerry, I came to believe that we were really dealing with someone who was addicted to scamming, addicted to ripping people off.

That it was not really just about the money because by my count, he had a lot of money already when he was stealing from people, you know? Um Maybe it's a form of gambling addiction. Um I It depends what you want to call it. But it it definitely seems to me like this stuff that he was engaged in went beyond simply trying to get money and into the realm of sort of scamming for sport. Um and it It was an escalating thing, too, you know, where he went from doing these very like low-level internet high-yield investment schemes to he gets involved in Bitcoin, and all of a sudden the stakes go up a thousandfold. You're

not stealing hundred thousand bucks, you're stealing couple hundred million bucks. Um and I think it looks like he got in over his head, you know? Well, yeah, there I think one of the probably most memorable moments is at the end, Jennifer connects with Michael Patryn. And um why don't you tell that story? Um but that for me was just like, "Wow." I uh I feel like This is one story Maybe I'll hold this story to I feel like it's better if a spoiler. Okay. Or you don't want to see a spoiler.

Well, I feel like it's better if you kind of get it in context of of what was happening when. Like, most of the story takes place in like the 1 month after he dies. That story, I think, is best uh left to the end. But, you know, I will say I'll give a different spoiler, actually, which is Jen's writing a book. She's writing a tell-all uh a memoir about her experiences. And that, in addition to the story that you just referenced, are in my opinion evidence that that maybe she's telling the truth and maybe maybe Gerry really is dead because otherwise, you have to believe that she's writing a book um about a lie

that could potentially, you know, get her in a lot of trouble. And that feels like pretty hubrisy to me. So, when I looked into Gerry, all I found was sketchiness and scams. Looking into to Jen and what's happened to her in the last year, I have some trouble believing that she's really um keeping this this horrible secret that that could, you know, fall apart at any moment. But again, I you know, I leave it to everyone to to come to their own conclusions about it. If personally, my conclusion has veered back and forth many times in the 2 years I've been working on on this show. And I still wouldn't say I'm confident at all in my conclusions.

Well, I was going to That was going to be my last question to you. Like, you know, what do you really think happened? But you Do you feel you have an answer for that? I feel like I set out to figure out what happened to Gerry and what happened to the money. And I feel satisfied now that I know what happened to the money. And that's an easier thing to know because there's a record on the blockchain of where a lot of the money went. In terms of Gerald Cotton himself, I don't feel like we were able to definitively prove that he's alive. Um In order to do so, I think I would have to find him alive.

I'd have to find him on a beach somewhere or find definitive evidence that he's out there doing stuff. And to prove that he was dead, at this point, I think that exhumation would have to happen or someone would have to reveal something that law enforcement knows that I don't in order to do it. So, in terms of proving either way, I don't think that that that proof exists. I think without the power of law enforcement, it'll be difficult to achieve that proof. Um Well, but if you had a bet your favorite crypto, which which way would you Which way would you bet?

The longer it gets away from what happened and he doesn't show up somewhere and get caught, I think slowly I inch towards thinking that there's a good chance he's really dead. Um but short of an exhumation, I am still always I wake up in the night sometimes thinking about this, and I think of a different way that he could have tricked me or um you know, manipulated reality. So, I still believe both could be true. I I I'm always going to believe that on some level, even if what it would have taken to pull this off was

totally grandiose, um Gerald Cotton does seem sometimes like he is the the kind of person who could have done something like that. So, um I'll hold off on my final judgment until I see proof one direction or the other. All right. Okay. Well, this has been super fun talking with you about your journey. Where can people learn more about you and Exit Scam? Uh you can find out about You can just search Exit Scam in any of the podcast stores or it's at exitscam.show. Um you can just follow me on Twitter at Aaron Lammer. I do all kinds of podcast stuff. So, if you like podcast stuff, check me out.

Great. Thank you so much for coming on Unchained. Thanks Laura. Thanks so much for joining us today. To learn more about Aaron and Exit Scam, check out the show notes for this episode. Unchained is produced by me, Laura Shin, with help from Anthony Yoon, Daniel Ness, and Mark Murdock. Thanks for listening.