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A message to yousufj56 (the original poster) and others here who have been affected by this:

Posted just yesterday, the FBI is investigating QuadrigaCX and is seeking information from potential victims. If you've been affected, take a look at:
https://www.fbi.gov/resources/victim-services/seeking-victim-information/seeking-victims-in-the-quadrigacx-investigation
https://www.cbc.ca/news/canada/nova-scotia/fbi-quadrigacx-cryptocurrency-exchange-1.5161853

Both the RCMP and FBI are investigating QuadrigaCX. A potentially complicating factor is that you should generally not ever talk with law enforcement without first consulting with a lawyer, even if you're not the one being investigated. So the best advice I can give, to people who were affected, is to first consult with a lawyer and only then consider communicating with the FBI and RCMP.
 

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This is a story about how easy it is to fleece people and get away with hundreds of millions of dollars. The money is somewhere and somebody owns it.

The owner had $12 million in assets. A pittance compared to the total. Where is all the rest of the money ?

I think there is a 100% chance all the bitcoins went into a "mixer" website that combines all incoming bitcoins with other bitcoins, to foil police from following the transaction trail.

If bitcoin is legit.............why do they have mixer sites ?
 

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This is a story about how easy it is to fleece people and get away with hundreds of millions of dollars. The money is somewhere and somebody owns it.

The owner had $12 million in assets. A pittance compared to the total. Where is all the rest of the money ?

I think there is a 100% chance all the bitcoins went into a "mixer" website that combines all incoming bitcoins with other bitcoins, to foil police from following the transaction trail.

If bitcoin is legit.............why do they have mixer sites ?
Sags my bet is somebody had the keys ,not sure if it was him but these coins were removed and moved around .There has been many posts about activity around time he died but I have not followed it closely as I never used these guys.Coinbase is now linked to Paypal too but the bitcoin were suppose to be anonymous seems governments and banks are trying to get everyones ID .On blockchain for instance they will give you $25 free to add your name and email if people are saving thousands not paying taxes they will not give it up for $25.That is the issue with this case they may get wallet addresses but not link names to everyone of them.Bitcoin dropped 11% in past 5 days .
 

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What amazes me in that the SEC allows this to happen under their noses. By the time they notice, it is too late to close the barn door. Remember BreX?
 

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According to this story https://www.bloomberg.com/news/articles/2019-06-11/crypto-exchanges-are-facing-biggest-regulatory-hurdle-yet and similar ones in Bloomberg, international authorities will soon be cracking down on bitcoin exchanges because they are so convenient for money laundering.

The issue with QuadrigaCX was not money laundering, so much as losing depositors' funny money, either intentionally or through corporate incompetence. The CEO was the only one in the company with the encryption key to the "vault", and he disappeared. This is corporate financial mismanagement on a grand scale. If the speculations that he faked his death are true, it is criminal fraud. Either way it means there is no real financial accountability in these businesses. You might as well give your money to a complete stranger and tell him "Here, keep this under your mattress for me."
 

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Not only did the guy with the only key to the "vault" disappear, but the contents of the vault were also cleaned out. So I think it sounds more like embezzlement or theft, because (by my reading of the articles) those assets weren't just lost as initially reported, they were pulled out when they shouldn't have been pulled out.

Another problem with these crypto currencies is that there just isn't a lot of market liquidity and depth. The whole thing is like a bunch of penny stocks being traded among very few participants... this can be used to run the price one way or the other, but is that something you want to store your money in? With such limited liquidity and limited participants, there is no price stability. More recent research has uncovered that a huge number of trades at the exchanges were in fact wash trades, with one person trading against themselves. For a long time this created the perception of more liquidity than there really is.

To me, crypto currencies are more like unregulated penny stocks. It shouldn't be particularly surprising when the price goes up (or down) dramatically, and yes they will be very exciting.
 

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The latest is that the founder withdrew much of the $80 million cash and transferred $190 million worth of bitcoins and other coins to exchanges where they could be traded.

He lost some money on the trades and exchange fees, but it is impossible he lost all the money. There is no doubt it was a fraud perpetrated by the founder.

It would be difficult to believe his wife knew nothing about the sudden money they were spending, and I suspect the founder is alive and well in Asia under an assumed name.

The co-founder of the exchange is wanted by the US for fleeing after being convicted of identity theft and fraud.
 

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Still over $100 million missing.

The money went somewhere. The bitcoins were sold somewhere. If the blockchain is so good at recording transactions why aren't they there ?

Something isn't adding. The claims of blockchain don't seem to match the reality.
 

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There's nothing wrong with blockchain.

Using a scam exchange like Quadriga is the equivalent of depositing your money at a scam bank.

It's ill advised to leave significant crypto on any exchange
 

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Wow!

Quadriga CEO’s Widow to Return $9 Million of Estate Assets

The CEO's wife is going to return $12 million CAD worth of assets from the estate back to the company. This is great news for affected people, and the trustee is saying that this will "materially improve the expected distributions to Quadriga shareholders". (but does 'shareholders' mean people who stored assets with them?)

“I have now entered into a voluntary settlement agreement where the vast majority of my assets and all of the estate’s assets are being returned to QCX to benefit the affected users,” she said. “These assets originally came from QCX at the direction of Gerry.”
 

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There is $260 million missing. Where is the rest of the money ? That kind of money doesn't just vanish. Why can't authorities find the silent partner hiding in Asia somewhere ?

I still think it is all a scam and the guy is still alive and hiding out with his partner in remote Asia somewhere. Maybe they bought a resort for themselves.

Authorities seem to eager to accept a small offering to end it........so the scammers can live in peace and happiness after the wife pays up the small amount and disappears.
 

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Bitcoin also fell from $10,000 to $8,000 per unit.

It is going nowhere at the speed of light.
 

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I am a little baffled as to why the authorities can't track the money from Quadriga wallets to other wallets.

The notion of total secrecy in bitcoin is bogus, unless the person never spends the money or never moves it to an exchange that employs a KYC (know your customer) rules.

Many bitcoiners intently watch the wallets containing the first bitcoin transactions to see if Satoshi Nakamoto moves the money. They could then follow the money.

The wallet may be anonymous, but the time/date stamp on the transaction will trace back to the order that was implemented at that exact time and date at that exchange.

Who is going to steal $260 million and never spend it ?

For $260 million, one would think the RCMP would employ an international team to track the money down. They simply don't have the expertise to do the job.

I suggest they go on Reddit and recruit some of the best hackers on that site to focus all their time and expertise to tracking down the money.
 

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sags, we did a bit of this work at my computer security firm. What happens is that the trail runs cold.

The bitcoin ledger does show each transfer, from one wallet to another. In the Quadriga case one could clearly see the transfers out of Quadriga and into accounts at other major exchanges.

Ernst & Young reported on how the Quadriga CEO transferred the money out, to use for his own lifestyle.

However, the problem becomes what happens after that point. Crypto currencies are a dream for money laundering. You can generate a brand new wallet, and then transfer money from one to another. The money does not sit in one place... it is constantly transferred. For example, if a criminal receives dirty the money, they will hop it from one wallet to another.

The criminal networks in bitcoin and ethereum even have tools for this, called "mixers". The mixers are automated money laundering systems. Another big source of laundering are gambling web sites, which presumably involves games of chance but which are also used to distribute funds among people for the purpose of concealing money trails.

Law enforcement (who I've worked with on this topic) has been developing tools to trace these transfers, trying to link them up with other information to figure out where the money goes. But the trails can run cold awfully fast, if someone has been diligent about transferring the coins around.
 

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It sounds like good reasons to ban crypto-currencies.

From what I have seen their primary purpose is to hide criminal activity, terrorist operations and aid fraudulent activities.

Just what we need.
 

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I don't know sags. There are lots of excellent uses as well, but there definitely needs to be more regulatory control. I would argue for regulation, not banning.

The first thing we'll have to see is how many users remain after regulations go into force.
 
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