Home Archive California Engineer Loses $422,000 in Life Savings after Using QuadrigaCX; Is Help Coming?

California Engineer Loses $422,000 in Life Savings after Using QuadrigaCX; Is Help Coming?

Yashu Gola
Last Updated March 4, 2021 2:53 PM

A California-based engineer lost the entirety of his life savings after using QuadrigaCX’s cryptocurrency exchange for remittance.

Tong Zou, 30, said in an interview  with Bloomberg that he had opened a withdrawal request at QuadrigaCX in October 2018. According to his statements, he was planning to move to Canada at that time. Zou thought using a cryptocurrency exchange for remittance would save him money. So, he purchased bitcoins in the US and transferred them to his Canada-based Quadriga CX exchange account for a quick fiat withdrawal.

“I wasn’t using it for trading — I just wanted to move my money over to my Canadian bank account,” said Zou.

$190 Million Disappeared

However, the withdrawal requests made by Zhou and other 115,000 people met a dead-end after QuadrigaCX declared itself insolvent. The exchange announced that it had lost access to $190 million worth of cryptocurrencies after its founder Gerald Cotton died unexpectedly during a humanitarian trip to India. Cotton reportedly was the only person who had access to QuadrigaCX’s cold wallets. After his death, the exchange decided to discontinue services and filed for Creditor Protection at a local court.

But for clients like Zou, the wait is a nightmare. He told Bloomberg that had had already relocated to Vancouver. But, with all his savings disappeared into QuadrigaCX, he could not afford himself a decent apartment. At the same time, he was planning to look for a job while surviving on his life savings. He cannot do it either.

“It’s all my savings, so I’m just living on what little I have left and trying to start over,” said Zou. “It pretty much took everything away from me […] I was going to use that money for a deposit on an apartment, but now I can’t do that anymore. And now I’m currently searching for a job, so it’s kind of a bad time for me.”

Is Help Coming?

Zou and other QuadrigaCX users are coordinating with each other via a Telegram messaging group. The victims turned to Bennett Jones LLP and McInnes Cooper to represent them in Quadriga’s ongoing creditor protection proceedings in the Supreme Court of Nova Scotia. Their motion will be heard on February 14 at 0930 local time.

Meanwhile, state securities regulators in Canada are divided on whether or not they are liable to investigate QudrigaCX. Late Friday, the British Columbia Securities Commission (BCSC) clarified that they would not initiate an inquiry against the cryptocurrency exchange. However, almost 24 hours later, the Ontario Securities Commission (OSC) said that it was “looking into the matter.”

The commission didn’t clarify whether or not it would initiate a formal investigation into the $190m scandal.

Users have accused QuadrigaCX of faking Cotton’s death to steal from their cold wallet reserves. Blockchain forensic experts also found that the exchange didn’t have any cold wallets in place – based on deposit/withdrawal data they accumulated from its clients.

On February 5, Quadriga received a 30-day stay on claims from creditors and potential lawsuits. The exchange expects to gain access to Cotton’s laptop to retrieve the lost money.