Part I: The Lost Password

Hi, I'm Dr. Mary Claire Haver. If you're ready for honest conversations about what it takes to thrive in midlife and to maximize your health, your power, your purpose, then my new podcast UnPost is here for you. Join me and expert guests every week as we tackle what really matters in the second half of life. Make sure you never miss an episode by following UnPost with Dr. Mary Claire Haver on Amazon Music. Just open the app, hit Follow and let's start living UnPost together. My name is Gerald Codden and I'm the founder of Quadriga CX, which is Canada's largest Bitcoin exchange. I want to tell you the story of Gerald Codden. Mary was 30 years old from Nova Scotia and in the fall of 2018, he took a trip to India with his wife, Jen. Jerry and Jen were newlyweds, so it was kind of a honeymoon. They landed in New Delhi, did Torah stuff like visit the Taj Mahal. Eventually they were supposed to end up in a small village to attend the grand opening of an orphanage that they donated money to help build. Jen's luggage was stuffed with teddy bears for the kids. But first, Jerry and Jen hopped another flight to Jaipur and checked into one of the most expensive hotels in the whole country. They were booked for four nights, but they barely got into the room when Jerry started to have stomach pains. He had Crohn's disease and stomach pain came with the territory, but this time it was bad enough that he and Jen decided to go to the hospital. The doctors put Jerry on antibiotics and had him spend the night, but the next day his condition took a turn for the worse. He had trouble breathing and then he went into cardiac arrest. The doctors revived him and put him on a ventilator, but he went into cardiac arrest again. He was revived one more time, but then his heart stopped for good. At 7.26pm and December 9th, 2018, Gerald Cotton was pronounced dead. So the story I just told you is the official account of Jerry's death. Everything we know about Jerry's final hours comes from his doctor and his wife, Jen. In most cases, there'd be no reason to doubt a doctor and a grieving widow. But Jerry's case is not most cases. I'm Aaron Lammer. Welcome to Exit Scan, a podcast about a mysterious death and a missing fortune. This is part one, The Lost Password. Did the CEO of what if Canada's biggest cryptocurrency exchanges died while he was on a trip to India? Neighbors on the Kalona street where Gerald Cotton owned a home are also stunned. He was the CEO of Cardriga CX. Nobody knew it yet at the end of 2018, but Jerry's death was about to cause some major problems. It kind of problems that make international news. Because Jerry was an important guy, he was the CEO of Bitcoin Exchange. It's a website where you can buy and sell Bitcoin, and Jerry's exchange was the biggest one in Canada, who's called Quadriga. I'm joined by Gerald Cotton, who is the president of Quadriga Fintech Solutions. So tell us about Quadriga Fintech Solutions and what your technology is. We're basically a clearinghouse where Bitcoin traders across the country buy and sell Bitcoin. Approximately 80% of all Bitcoin trading in Canada takes place on our platform. In 2017 alone, more than a billion dollars worth of Bitcoin and other cryptocurrencies was traded on Jerry's exchange. But Bitcoin Exchange is also work a little like banks. They hold customers money for them, because most people who buy Bitcoin do it as an investment. Instead of spending it, they'll just leave it in their accounts. When Jerry died, Quadriga had 76,000 customers, who had a total of 215 million dollars stored on the exchange. Some customers only had a little bit in their accounts, maybe a few hundred bucks. Others had their entire life savings on Quadriga. But there were some things those customers didn't know about the exchange that was holding their money. Number one, even though Quadriga seemed like a big company, it was actually tiny. In fact there was only one full-time employee, Jerry. There were a few freelance contractors who handled things like customer service and social media, but they all worked remotely. Most of them had never met Jerry. Quadriga didn't even have an office. Jerry ran the whole exchange from his laptop, from his house and Halifax, or wherever he and Jen happened to be traveling. For all intents and purposes, Jerry was Quadriga. He called all the shots. He alone had access to the money the exchange was holding for its customers. And now he was gone. After Jerry's death, Jen flew home from India with his coffin. There was a small funeral for friends and family in Halifax. But nobody beyond those friends and family knew that Jerry had died. Because at first it was kept a secret. For weeks there was no formal announcement or obituary in the newspaper. Eventually though, some of Jerry's customers realized something was wrong. Quadriga continued to accept new deposits, like it always had, but it became harder to take money off the exchange, but they're all slowed down, and then they stopped altogether. On January 14th, a whole 36 days after Jerry died, a notice was posted on Quadriga's website. It was written by Jeff. It is with a heavy heart that we announce the sudden passing of Gerald Cotton, co-founder and CEO of Quadriga CX, a visionary leader who transformed the lives of those around him. This isn't actually Jen, it's our sound mixer's wife. She is Canadian though. Jerry died due to complications with Crohn's disease on December 9th, 2018, while traveling in India where he was opening an orphanage to provide a home and safe refuge for children in need. Jerry cared deeply about honesty and transparency, values he lived by in both his professional and personal life. Jen acknowledged the complaints about slow withdrawals, but she said not to worry. She told the customers the exchange would be up in running soon. They could get their money back within two weeks, but that's not what happened. A couple weeks later, Quadriga filed for creditor protection. That's a bit like bankruptcy. It's what you do when you can't pay people while you owe them. Quadriga said the reason it needed creditor protection was because the company had lost access to its own funds. Jerry was the only person who knew the passwords to unlock the exchange's cryptocurrency, and he had died without telling anyone where to find them. And that meant there was no way for Quadriga to give its customers back the $215 million that was rightfully theirs. Those customers were screwed. Hey guys, how's it going? So I just want to give an update about my situation right now. This is a customer named Tong Zoh, who went semi-viral after posting a YouTube video about losing money on Quadriga. Recently, this Canadian crypto exchange company called Quadriga CX is filing for creditor protection, which means basically there's one step away from bankruptcy. And I kind of got caught up in it, unfortunately. And yeah, I pretty much ended up losing my life savings because of it. Tong says he had $400,000 in his account when Quadriga shut down. And I don't think anyone could have predicted this. Who could have predicted that the CEO would die mysteriously in India while he was on his honeymoon building an orphanage? It honestly, no one could have predicted something like that from happening. This is free range with Von Miller, the podcast where I step outside the lawns, and I take you with each week. We're talking everything from the biggest stories around the league to the biggest stories off the field. This isn't your average sports podcast. This is game meets culture, locker room meets living room, and no topic is off limits. So if you're in a good conversation, there are a few others. Join me every Wednesday and follow a free range with Von Miller everywhere you get your podcast. When Jerry's death and missing password hit the news, it became a big story. You could hear about it even in places where you didn't usually hear about Bitcoin. And parents sudden death of the company's young CEO just 30 years old. So it's a real mystery and Scott is here to help us unravel what we know so far and why people are stuck with no access to their money, Scott. Yeah, this is a real mystery that's easy to understand why people were drawn to Jerry's case. It was a catchy story. It had a small everyday problem, a missing password. But with massive consequences for thousands of Canadians. For most people, Jerry's story was a novelty or cautionary tale. But for people who follow Bitcoin closely, it was a bigger deal. I know this because I am one of those people. I care way too much about cryptocurrencies. I own them, I read about them, I check the price of Bitcoin every five minutes. At the time of Jerry's death, I was hosting a podcast about crypto. What do you make of this whole quadriga mess? All right. Finally, this is what I wanted to talk about. If you would ask me, right, just straight off the bat, is quadriga a low budget video game system from the 90s that was canceled? I'd be absolutely. It does kind of sound like Amiga. So he dies and it turns out that he has one password for all the Bitcoin. There's a lot of fishy elements of this. But in total, it's something like 190 million dollars. When I heard about quadriga, I became obsessed. So did my producer, Leon Brown. We spent hours a day discussing Jerry and his passwords and all that missing money. Pretty soon, we were investigating the case ourselves, pulling court documents, talking to Jerry's friends, and retracing his steps through India. The more we learned about Jerry, the more mysterious he seemed to become. But over the eight episodes of this podcast, we're going to try to cut through all that and figure out who Jerry really was and what really happened to him. Maybe you're wondering how what happened to Jerry was even possible. You've probably lost passwords before, but reset them by answering a couple security questions. Well, in Bitcoin, there's no such thing as a password reset. Bitcoin stored in digital wallets, which are protected by passwords called private keys. A private key is a random string of 64 letters and numbers. If you lose it, there's no way to recover. This is Bitcoin 101. It's one of the first things you learn when you get into crypto. Don't lose your private keys. Jerry especially would have known how serious this was. He even talked about it in an interview in 2014, a little bit after quadriga launched. There's a lot of people who have lost the Bitcoin. A lot of Bitcoins. They're just sort of floating around there. They're not retrievable at all. It's like burning cash in a way. I mean, it's next to impossible to have recovered those coins. Even like the US government with the biggest computers in the world could not retrieve those coins, if you've lost the private key. So without the private keys to quadriga's wallets, the customer's money was frozen forever. Hundreds of millions of dollars suspended in a crypto purgatory. Do you think knowing all this, Jerry would have made a backup plan for his passwords? Maybe they'd have written them down and hid them somewhere in his house, or given them to his lawyer in an envelope. Jen told authorities that that's what she figured too. She thought Jerry had taken precautions. She said he once told her that he'd set up a dead man's switch. As a service that sends you an email every so often to make sure you're still alive. And if you don't respond, it automatically sends you important information, like your passwords, to someone of your choosing. It's an insurance policy for situations exactly like this one. Jen said she expected Jerry's passwords to arrive within a week of his death, but when she got home from India, she waited and waited, and those passwords never came. She started to get anxious, so she called in professional help. There's obviously a lot of money involved. And so they need the private investigator, they need somebody to take a trust. This is Chris McBride. He's a cybersecurity specialist. Both, yeah, 27 years with the Royal Canadian Mounted Police, and I worked in kind of an international fugitive unit, where I worked a lot with the FBI and US Marshall. Chris retired from the Royal Canadian Mounted Police in 2018 and started his own consulting business. Jen was one of his first clients. What did they hire you to do? My job was to analyze the electronic and IC devices to attempt to locate cold walls of Quadriga CX and Gerald Cotton. And the overall objective was to locate funds, so that the clients of Quadriga CX could be paid and the company could keep going. That's what I was told I was the reason for doing that. On December 30, before Quadriga customers even knew that Jerry had died, Chris went to the Jerry and Jen's house in Halifax to snooper out. The approach that was agreed upon was that I would attend the deceased residence. I was going to examine all the electronics that were available, and then I would also search areas for any passwords that were written down. Can you tell me anything about what devices you examined? My exam several laptops, desktop, and from we were able to access, you know, basically a lot of accounts. What did you find in those accounts? Was there anything that was substantive to the attempt to get Quadriga customers money back? I will say that we found things from my perspective, the amount of things I found was significant from the perspective of the overall $250 million, which allegedly I heard was the total. It was not significant in the amount, right? What Chris just said there was that he hacked into some of Jerry's devices and accounts, but he didn't find any private keys, or anything that would help recover the $215 million. The only hope was a dead man switch. When you were working on this case, were you like thinking, "Oh, this dead man switch might arrive any day and make this all boot?" Yeah, I hoped it would happen, and I took extraordinary steps to discover it. In fact, I got to be careful here, but we were able to determine that he absolutely did not have a dead man switch. So Jerry hadn't made any backup plan for his customers' money, but funnily enough, he had made a plan for his own money. Just three days before he left for India, Jerry made a will. It turned up online right after his death was announced. That will, he left everything to Jan. And he had a lot of stuff, a 50-foot yacht, a single-engine airplane, and a real estate all over Canada. Jerry then set up a $100,000 trust fund for his and Jan's two chihuahas, Nitro and Gully. When Jerry's customers saw his will, they got suspicious. Everything they thought they knew about Quadriga had been a lie. So why should they believe the story they were being told now? Especially since the person telling it, Jan, had just inherited a fortune from the guy who lost all of their money. To them, this didn't sound like a case of carelessness or bad luck. It sounded like a scam. And in Bitcoin, if something sounds like a scam, it usually is. In fact, so many Bitcoin businesses have shut down and stolen their customers' money that there's even a name for it. The exit scam. In an exit scam, the company insiders usually give an excuse for why they can't pay people back. Like, say they got hacked. And then they disappear, along with the money. Quadriga's customers started to wonder, could Jerry have pulled an exit scam? By faking his death? In an affidavit filed with the court, Cotton's widow said she had received online threats in what she called "slanderous comments," including questions about the nature of her husband's death and whether he is really dead. When I first heard the theory that Jerry faked his death, I thought it sounded farfetched. After all, we have evidence that Jerry is really dead. For one thing, Jerry has a death certificate. You can see it online. It's official. It was issued by the government of Rajasthan, and it says Jerry died in Jaipur. Though it has a tiny error, Jerry's last name is spelled wrong with an "an" instead of an "an." For another thing, we know that Jen brought a coffin home from India. It went through customs, it's buried in Halifax, and there's a grave with Jerry's name on it. And finally, there's the account of Jerry's death that I told you about at the beginning of this episode. It came from a medical report written by Jerry's doctor. When Canada's Globe and Mail newspaper contacted that doctor, he confirmed that Jerry had died exactly the way he described in the report. So that's a death certificate, a doctor's report, and a coffin. Case closed. Jerry's dead. Right? Well, maybe not so fast, because it turns out that in certain parts of the world, all three of those things are for sale. This is Stephen Rahmbaum. He's a private investigator whose specialty is tracking down people who fake their death. He estimates that he's solved 750 fake death cases in his 37-year career. What is it about countries like India and the Philippines that make them hotspots for this kind of tourism? Well, first of all, it's contempt for the U.S. and the West. They don't think that they're really hurting anybody if they defraud New York life out of a million dollars or a bunch of rich Canadian investors out of a bunch of bitcoins, which sounds like something from out of space for the average Indian citizen. At the end of all, there is a culture of corruption. It's done and it's not frowned on. It's an understood thing. So I know India is a good place to do this and get down there. Who do I call? They call themselves facilitators, actually. They're pretty, they're pretty, you know, it's a business for these guys. And you can buy what's called a death kit in many countries, which is everything you need from soup to nuts. Let's say you decided that you died in a car accident, but you can get the police accident report. You can get the identification of the body. Oh, I'm sorry. You can get a doctor's report. You can get a coroner's report and you can get the death certificate all for about $1,000. You can get a body for a few thousand dollars. Do you think Jerry's death is the kind of case you would take on as an investigation? Every red flag you can think of in the death claim business, he's managed to wave that red flag. So Jerry could have faked his death in India, but there was no way to prove he did. Sort of digging up his grave, which the police weren't quite willing to do yet. But when it came to the missing $215 million, the customers did have some recourse. In Quadriga Files for Creditor Protection, the court appointed an accounting firm, called Ernst & Young, to look into the company's finances. See if it could recover any of the missing money. So Ernst & Young started digging. The examine Quadriga's back at and interviewed the company's freelance contractors. Jen handed over Jerry's computers and phones, plus the addresses of six locked wallets where Jerry had kept his customer funds. Now, those wallets were locked, but that didn't mean they were useless. A lot of people think bitcoins anonymous, but it's not. Every bitcoin transaction is part of a public record, called a blockchain. If you know the address of someone's wallets, you can look it up on the blockchain and see every deposit and withdrawal to and from that wallet. You can also look up how much is in the wallet, and how much has been in the wallet at any point in the past, like having X-ray vision. So Ernst & Young used that X-ray vision to look into Quadriga's wallets, and what they found was shocking. The wallets were completely empty. Those wallets should have contained 215 million dollars in cryptocurrencies. It might have been frozen and inaccessible, but it definitely should have been there. And not only were the wallets empty, they'd been that way for a while. Someone had cleaned them out, withdrawing the last few coins in April of 2018, eight whole months before Jerry's death. So even if someone had found Jerry's private keys, all ridden down some place, it wouldn't have mattered. The customer's money was long gone. So that meant the story the customers had been told, that their money had been lost because Jerry didn't tell anyone his passwords was bogus. And if that story wasn't true, what about the story of Jerry's death in India? If Quadriga's wallets were empty, could Jerry's coffin be empty too? Coming up this season on ExitScan. And let me paint the picture. Mr. Cotton looks probably exactly what you think an internet genius would look like. Are we hanging out with Mark Zuckerberg right now? Unfortunately not. Since 15, he was a con man. I mean, he was running these schemes since he was a kid. He introduced himself as the CEO of Quadriga, and I never found that weird at all. You realize the money was gone pretty much immediately from the code that's on the blockchain? I'd already at that point gotten a tip that, you know, Quadriga wasn't bigger trouble than anyone had thought or anyone knew. If he faked his death, the possibility of her not being an active and willing artistiment is minuscule. I honestly said I don't know if this guy owes money to people. I don't know if his wife is a scam artist. My money now is on my belief that he is still alive. He probably has just listened to this podcast and heard my words. And that makes me feel a little bit creepy and unsettled. ExitScan was written and produced by Aaron Lammer and Lane Brown, mixing and additional editing by Martin D. Fowler, show art by Mickey DuJay. The theme song is by Frances Melites and music was by Frances Starlight, Mark Allen Piccolo, Ross C. Manini, Martin D. Fowler and myself with additional cues from Epidemic Sound and Blue Sessions. Our executive producers are Max Linsky, Lane Brown and myself for Treats Media, additional sound editing and producing by James Nicholson, additional producing by Jacqueline Scurry. Thanks to Jake Shryer, Anne Garrett, Jake Hang, Joel Lovell, Evan Ratliffe, Patty Greco and JD Crowley. If you want to listen to next week's episode right now, you can listen to it in the Odyssey app that's A-U-D-A-C-Y, it's free, download it today, you'll be one week ahead, we'll be back next week. [BLANK_AUDIO]